Forex Analysis & Reviews: 18.06.2024 - The pound may resume growth....

Live Chat

InstaForex - Official partner of Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

18.06.2024 12:44 AM

The pound may resume growth. Overview of GBP/USD

The Bank of England will hold its monetary policy meeting on June 20, and the rate is expected to remain at the level of 5.25%. This meeting will not be accompanied by updated forecasts, so the market may show a somewhat muted reaction.

Since the previous BoE meeting, macroeconomic indicators have generally been slightly better than expected – GDP growth in Q1 increased by 0.6% against a forecast of 0.4%, and wage growth remained high, aided by a recent increase in living wages. Inflation data for May will be published on Wednesday, revealing a significant disparity between the services and goods sectors. Prices for goods was in negative territory in April, while prices in the services sector are slowly decreasing, having fallen to only 5.9% in April, which is still quite high.

After the announcement of early elections in the UK, all speeches by Committee members were canceled, so there are no comments, and markets are relying on their own forecasts. The Conservative Party is highly likely to lose the elections to the Labour party, which would allow for a review of the budget and rate outlook. Markets are currently anticipating the first rate cut in August and will be looking for confirmation of their forecasts on Thursday, with a 60% probability of another cut this year. Two BoE cuts would correspond to two Federal Reserve rate cuts, and these expectations are already priced in, so there are no grounds for significant movements at the moment.

The pound is one of the few G10 currencies for which investors continued to accumulate long positions against the dollar. According to CFTC data for the reporting week, the net long position increased by $0.4 billion to $3.9 billion. Despite this, the price, primarily due to the bond market, has lost momentum and is trying to turn downwards, although it remains well above the long-term average.

A week ago, we expected the pound to rise further, but the pair followed the general trend and retreated after reaching a 3-month high, just shy of the resistance at 1.2892. The pullback was deep; however, there are few grounds for further decline unless May's inflation data brings surprises. We expect the pair to trade sideways until Wednesday, with the BoE's meeting on Thursday providing clarity on rate forecasts, after which the pound may resume its upward movement. The closest target is still the local high of 1.2892, and moving towards the next resistance at 1.3040/60 will require at least one strong factor, which may appear this week.

It's also important to consider the possibility that the Committee may take a more dovish stance, which could be reflected in the number of votes for an immediate rate cut (currently projected: 7 for maintaining the rate and 2 for an immediate cut). If this happens, the pound could become weaker and consolidate below 1.2630/45, aiming for 1.2580.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.