GBPUSD | BoE Signals Exhaustion in Sterling RallyLast week we posted a bullish idea on Cable. That view has now played out, and we believe GBPUSD looks exhausted. The technical picture suggests another leg lower is forming — potentially completing a double zigzag structure.
The latest Bank of England meeting gave markets little reason to extend the pound’s rally. The BoE held rates steady at 4%, but the tone was far from constructive. While two members pushed for a cut, the majority stressed lingering inflation pressures, especially in services and food. This cautious stance effectively keeps policy restrictive, limiting the scope for GBP strength.
At the same time, the central bank slowed the pace of its quantitative tightening programme, reducing annual gilt sales from £100bn to £70bn, and scaling back long-dated bond disposals. This was read as a signal of unease around market functioning. In practice, it tilts expectations towards a softer BoE down the line — a backdrop that does not support sustained GBP demand.
On the technical side, Cable has broken lower from its ascending channel, with RSI showing room to extend further down. Momentum is shifting away from the bullish camp, and price action is now leaning towards a downside continuation.
Scenarios:
If the break below the ascending channel holds, momentum could carry GBPUSD toward the 1.3100 area.
If buyers reclaim the channel, short-term relief is possible, but the macro backdrop still caps upside.
Takeaway: The BoE’s cautious tone and slower QT reinforce the case that GBPUSD upside is exhausted. Watch the channel break — it’s the key inflection for the next leg lower.
