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19.06.202603:30 विदेशी मुद्रा विश्लेषण और समीक्षा: GBP/USD Review. June 19: Total Dollar Domination

The GBP/USD currency pair lost about 220 pips on Wednesday evening and Thursday, and this is perhaps a conservative estimate. We explored the reasons for the pair's decline in the EUR/USD article on Wednesday evening. The results of the Bank of England meeting can indeed be considered more "hawkish" than the market had anticipated. Due to high inflation, which nearly doubled in just three months (and the process is not yet over), the Federal Reserve is forced to shift its monetary policy from gradual rate cuts to "emergency rate increases." Therefore, the growth of the U.S. dollar on Wednesday was entirely justified. But what caused the dollar's rise on Thursday?

On Thursday, the BoE announced the results of its meeting, and these results surprised absolutely no one. The central bank kept the key interest rate unchanged, while two members of the Monetary Policy Committee voted for a 0.25% increase. The number of "hawks" was noted in all official forecasts the previous day. However, just on Thursday, the forecasts were revised, and according to the new version, only one BoE official was expected to vote for tightening policy. In reality, there were two. Thus, the results of the BoE meeting can also be characterized as more "hawkish" than predicted.

Even setting aside the final forecast, the market expected a voting outcome of "0-2-7" and received the vote tally of "0-2-7." So, what was behind the fall of the British pound? The only possible assumption is that the market realistically expected a more "hawkish" stance from the BoE. However, this assumption does not hold up under scrutiny, as inflation in the UK has decreased to 2.8% over the last two months, which is even lower than before the start of the war in Iran and the energy shock. Thus, if the BoE was previously inclined towards easing monetary policy, why should it now lean towards tightening?

Moreover, the decline of the British pound on Thursday began BEFORE the results of the Bank of England meeting and BEFORE Andrew Bailey's remarks, who, by the way, acknowledged that inflation might accelerate slightly by the end of the year. However, whether this will indeed happen is uncertain. Thus, we conclude that on Thursday, the market continued to react to... the FOMC meeting. It was that meeting that could have triggered such a strong strengthening of the U.S. currency.

Consider this: on Wednesday evening, when the results of the FOMC summit became known, European markets were already closed. Therefore, European traders had no opportunity to react to this event. Instead, on Thursday morning, traders jumped into action almost from the very start of the European session. It is also worth noting that the unemployment rate in the UK fell to 4.9% in April, a level that should have prompted a strengthening of the British currency. Yesterday, we warned that it is unwise to draw hasty conclusions immediately after the FOMC meeting results are announced. The market typically needs around 24 hours to fully analyze information and act upon it. As we can see, the market's reaction was nearly twice as strong as on Wednesday evening.

The average volatility of the GBP/USD pair over the last five trading days stands at 89 pips. For the pound/dollar pair, this value is considered "average." On Friday, June 19, we expect the pair to move within a range bounded by 1.3126 and 1.3304. The upper linear regression channel is directed upward, indicating a recovery of the upward trend. The CCI indicator has entered the oversold area for the second time, warning of a potential end to the downward trend.

Nearest Support Levels:

• S1 – 1.3184
• S2 – 1.3123
• S3 – 1.3062

Nearest Resistance Levels:

• R1 – 1.3245
• R2 – 1.3306
• R3 – 1.3367

Trading Recommendations:

The GBP/USD currency pair maintains a downward trend. Trump's policies will continue to exert pressure on the U.S. economy, so we do not expect long-term growth in the U.S. dollar. However, 2026 is currently looking extremely positive for the dollar due to geopolitical factors and now also due to the Fed's readiness to raise the key rate. Therefore, long positions targeting 1.3428 and 1.3489 can be considered when the price is above the moving average. If the price is below the moving average line, short positions can be initiated with targets of 1.3184 and 1.3126.

Explanations for Illustrations:

• Linear regression channels help identify the current trend. If both are pointed in the same direction, it indicates a strong trend at present.
• The moving average line (settings: 20,0, smoothed) determines the short-term trend and direction in which trading should currently occur.
• Murray levels are target levels for movements and corrections.
• Volatility levels (red lines) represent the probable price channel in which the pair will spend the next day based on current volatility indicators.
• The CCI indicator entering the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

*यहां पर लिखा गया बाजार विश्लेषण आपकी जागरूकता बढ़ाने के लिए किया है, लेकिन व्यापार करने के लिए निर्देश देने के लिए नहीं |

Paolo Greco,
Analytical expert of InstaSpot
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