Sterling remained anchored near recent trend lows, flat on the day at 1.2627, as the sterling long unwind after last week's dovish BoE hold appears to have run its course -- signaling a bottom for now -- with last Friday's 1.2576, just below the flat 200-DMA at 1.2591, providing a base.

Trading is relatively subdued as GBP/USD held in a muted 32-pip range on Wednesday, amid caution ahead of the holiday weekend and U.S. Q4 GDP and Fed-favorite core PCE data on Friday.

The recent decline in GBP/USD, from the March 8 high at 1.2894 to Friday's 1.2576 low was predicated on below-forecast UK CPI data and the dovish BoE rate hold on March 21, both of which brought forward lower rate expectations.

Prior to CPI and the BoE hold, traders had priced in an August policy shift by the BoE, which has now been moved up to June.

For now, it appears sterling traders are unwilling to test the 200-DMA at 1.2591 and the March 22 trend low at 1.2576 ahead of the Good Friday holiday and important, though not likely well-viewed, U.S. data on Friday.

Barring a significant shift in U.S. growth or inflation data Friday, the symmetrical UK-U.S.
rate expectations in 2024, as indicated on LSEG's IRPR pages, hints that GBP/USD may be near a bottom for this cycle.

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