18.06.202610:01 Analisis Forex & Kajian: GBP/USD – June 18th: Will the Bank of England Indicate Future Rate Hikes?

On the hourly chart, the GBP/USD pair declined to the 76.4% Fibonacci retracement level at 1.3277 on Wednesday, rebounded from it, and began moving higher toward the resistance level of 1.3349–1.3355. Today, a rebound from this zone would favor the U.S. dollar and a return to the 1.3277 level. A consolidation above the 1.3349–1.3355 level would allow traders to expect further growth toward the 50.0% Fibonacci retracement level at 1.3408.

The wave picture turned bearish again following the FOMC meeting. The last completed upward wave exceeded the previous peak, while the new downward wave broke below the previous low. It is difficult to say how long the bears will maintain control this time, as support for the dollar may prove temporary. If we set aside the wave analysis, bears continue to dominate the market. However, once the conflict in the Middle East ends, the dollar could lose an important source of support.

The news background on Wednesday did not support the bulls or the British pound. In the morning, the UK inflation report answered the question of whether the Bank of England is likely to tighten monetary policy in the near future (it is not). In the evening, the FOMC meeting answered the question of whether the Federal Reserve may raise rates (it may). Therefore, the Bank of England could potentially maintain a neutral stance, judging by the inflation data, while the Federal Reserve has become more hawkish. This combination of factors provided strong support for the U.S. dollar.

However, the outcome of the Bank of England meeting remains unknown and has not been predetermined. Therefore, I would prefer to wait for the official results before drawing conclusions about the true sentiment of MPC policymakers. In my view, today we may encounter a sense of d?j? vu, as the Bank of England has also been forced to deal with elevated inflation for several years. Inflation in the United Kingdom has slowed in recent months but remains above the 2% target. Therefore, the fact that inflation is easing may prevent the Bank of England from making hawkish statements. At the same time, the fact that inflation remains elevated could increase the number of hawkish members within the MPC.

On the 4-hour chart, the GBP/USD pair rebounded from the 38.2% Fibonacci retracement level at 1.3429, reversed in favor of the U.S. dollar, and fell below the 23.6% Fibonacci retracement level at 1.3327. Therefore, the decline may continue toward the next corrective level of 0.0% at 1.3159. A consolidation above 1.3327 would allow traders to expect renewed growth toward 1.3429. No emerging divergences are currently visible on any indicator.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category of traders became more bearish during the latest reporting week. The number of Long positions held by speculators decreased by 7,944, while the number of Short positions increased by 4,051. The gap between Long and Short positions currently stands at approximately 46,000 versus 109,000.

Bears have dominated the market in recent months, which is unsurprising given the geopolitical tensions in the Middle East and the political crisis in the United Kingdom. The bearish advantage is now more than twofold.

I still do not believe in a long-term bearish trend for the pound. However, in the near term, everything will depend not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market has adjusted to expectations that the conflict will persist for an extended period. However, the latest news suggests that a ceasefire may still be achieved, although the process is unlikely to be easy or quick.

News Calendar for the United Kingdom and the United States:

• United Kingdom – Unemployment Rate (06:00 UTC)
• United Kingdom – Average Earnings Index (06:00 UTC)
• United Kingdom – Claimant Count Change (06:00 UTC)
• United Kingdom – Bank of England Interest Rate Decision (11:00 UTC)
• United Kingdom – MPC Vote Split on Interest Rates (11:00 UTC)
• United Kingdom – Bank of England Monetary Policy Statement (11:00 UTC)
• United States – Initial Jobless Claims (12:30 UTC)
• United States – Philadelphia Fed Manufacturing Index (12:30 UTC)

The economic calendar for June 18 contains eight events. Particular attention should be paid to the Bank of England meeting and all related announcements. The economic backdrop is likely to have a noticeable impact on market sentiment on Thursday.

GBP/USD Forecast and Trading Tips:

Short positions were possible after a rebound from the 1.3454–1.3466 level on the hourly chart, with targets at 1.3408 and 1.3349–1.3355. All targets have been reached. New short positions may be considered after a close below the 1.3277 level. Long positions were possible following a rebound from the 1.3277 level, with a target at 1.3349–1.3355.

Fibonacci retracement levels are plotted from 1.3158 to 1.3655 on the hourly chart and from 1.3866 to 1.3158 on the 4-hour chart.