The Bank of England’s (BoE) recent 25 bps rate hike hardly sustained the recent GBP rally, with cable reversing from an intra-month high of 1.3295. In the view of Benjamin Wong, Strategist at DBS Bank, GBP’s decline from last June’s 1.4248 peak appears to be edging close to exhaustion as we head out for likely better April.

Nearing exhaustion of multi-month decline

“The rally from the 1.1412 covid lows saw a 1.3200 neckline break which delivered an on-target high at 1.4248. Since GBP has struggled, and its price action is well within a descending channel – where we have a convoluted but clear pattern of a double three correction pattern. This pattern is usually deemed corrective in nature, and when completed, leads to an opportunity to go long.”

“Over a 10-year timeframe, the month of April is the most constructive month for GBP bulls.”