Recently analyzing the trend of the British pound, there's a question worth pondering: how much longer will the pound continue to fall?

Speaking of which, the British pound has indeed experienced quite a few ups and downs over the past few years. In 2015, it was still at a high of 1.53, but by the night of the Brexit referendum in 2016, it plummeted to around 1.22, a scene that made global markets realize how sensitive the pound is. Later, during 2020’s pandemic and the 2022 "mini-budget" disaster under Truss, the pound even collapsed to a historic low of 1.03. If you had been holding British pound investments since 2015, the experience over these years has definitely been uncomfortable.

But here’s an interesting shift. Starting from the end of last year, market expectations began to change. The U.S. started entering a rate-cutting cycle, while the Bank of England maintained high interest rates. This "policy misalignment" is actually bullish for the pound. Capital started flowing back into British assets, and the exchange rate gradually climbed from the bottom, now oscillating around 1.26.

I’ve observed that the pound’s movements follow a few clear logical patterns. First, whenever political uncertainty arises, the pound tends to fall first. Brexit, Scottish independence rumors—these uncertainties are what markets fear most. Second, during U.S. rate hikes, the pound usually weakens, but now the situation has reversed. Third, the Bank of England’s policies and employment data also matter: good data and a hawkish stance from the central bank tend to push the pound higher.

Looking ahead, the key factors for the pound are a few. UK inflation remains around 3.2%, and the Bank of England will likely keep interest rates high. Unemployment is stable at 4.1%, with strong wage growth—these support the currency. Meanwhile, the U.S. has already started cutting rates, with expectations of a 75 to 100 basis point cut in the second half of the year. This interest rate differential will continue to support the pound.

So, when might the pound rebound? My view is that if the U.S. continues to cut rates while the UK maintains high interest rates, the pound could rise back to 1.30, even challenging 1.35. But risks are clear: if UK economic data worsens and the central bank is forced to cut rates earlier, the pound might test 1.20 or even lower again.

For trading the pound, it’s best to focus on cross-market points, especially during the period from London open to the U.S. market open, when volatility is highest. Pay close attention to Bank of England decisions, GDP releases, and other major data.

If you’re optimistic about the pound’s future rise, consider going long. Of course, always set stop-losses to manage risk. The pound’s high volatility makes trading without stops very dangerous. Some platforms offer leverage and flexible trading conditions that can help you seize short-term trends, but only if you have a clear understanding of risk management.

Overall, the pound is at a turning point. Policy misalignment, widening interest rate differentials, and the global de-dollarization trend are creating opportunities for an upward move. But whether the UK’s economic fundamentals can support this, and whether political risks will re-emerge, are key variables. Keeping a close eye on policy directions and economic data from both the UK and the US will give you a better edge than relying solely on technical charts.