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Fed Hints at Rate Hikes; Will BoE Follow Suit?

(By ATFX Analyst Team)

Key Takeaways

The Federal Reserve kept its benchmark interest rate steady, but indications suggest a possible rate hike later this year due to rising inflation. Market futures are pricing in a September increase.

Today’s focus is on the Bank of England’s interest rate decision. While rates are expected to remain unchanged, guidance on a potential August rate hike could support the British pound (GBP). Conversely, a downbeat statement may lead to a decline in the pound. Additionally, US initial jobless claims are expected to decrease slightly to 225k, down from 229k.

 

Global Market Review 18/06/2026

The Federal Reserve maintained interest rates but adopted a hawkish tone, signaling potential rate hikes through the end of 2026 to address persistent inflation. As a result, the Dow fell 0.97%, the S&P 500 dropped 1.2%, and the Nasdaq declined 1.3%.

The hawkish outlook pushed US Treasury yields higher and lifted the US Dollar Index (DXY) above 100. Gold prices fell 1.7%, and spot silver dropped below $68. WTI crude oil also reversed gains, closing at its lowest since March 4.

 

Key Events Today:

  • 14:00 GB Unemployment Rate APR **
  • 15:30 SNB Interest Rate Decision ***
  • 19:00 BoE Interest Rate Decision & Meeting Minutes ***
  • 20:30 US Initial Jobless Claims ***
  • 22:00 US CB Leading Index MAY **

June 19th (GMT+8)

U.S. & China, Hong Kong Holiday

  • 07:30 JP CPI MAY **
  • 14:00 EU GERMANY PPI MAY **
  • 14:00 GB Retail Sales MAY **

 

Markets Analysis 18/06/2026

  • Resistance: 1.1546 / 1.1561
  • Support: 1.1471 / 1.1452

The Fed’s hawkish stance triggered a rebound in the dollar yesterday, pushing EUR/USD to its lowest level since late March. During Thursday’s early Asian session, the pair clawed back some losses, trading around 1.1510.

Analyst View: EUR/USD recorded its sharpest drop since January, briefly breaching 1.1500 before recovering some ground. The pair is now trying to hold above last week’s low but faces resistance near the 10-day MA at 1.1550.

Bias: Short-term bearish

  • Resistance: 1.3347 / 1.3365
  • Support: 1.3246 / 1.3228

Yesterday, GBP/USD dropped below 1.3300 amid weaker UK CPI data and a hawkish Fed stance, dampening hopes of a Bank of England rate hike and shifting focus to the BoE’s upcoming policy decision.

Analyst View: GBP/USD faced its biggest single-day loss this year but is attempting to regain 1.3300 as investors await the BoE decision. A hawkish statement could boost the pound, with resistance at the 10-day MA around 1.3370.

Bias: Wait-and-see near 1.3300

  • Resistance: 161.00 / 161.12
  • Support: 160.31 / 160.19

Fueled by the Fed’s hawkish stance, USD/JPY rallied to 160.80 yesterday, surpassing its late-April high. However, concerns over potential FX intervention by Japanese authorities may limit further gains.

Analyst View: USD/JPY is showing bullish momentum as it seeks to break out of its recent trading range, but intervention concerns may rise, with initial resistance at 161.00.

Bias: Range-bound at highs

  • Resistance: 78.25/79.39
  • Support: 73.49/72.58

Crude oil prices fell further, with WTI crude dropping 2% yesterday. Despite a brief rebound, investors are assessing the potential impact of an upcoming US-Iran peace agreement, while uncertainty remains over shipping through the Strait of Hormuz. Watch for the official signing of the interim peace agreement between the US and Iran tomorrow.

Analyst View: Oil reached $75 after edging higher and then retracing, with bears in control and further downside possible. Watch support at $73.49/$72.58 and the $70 target.

Bias: Under pressure at lows

  • Resistance: 4364/4403
  • Support: 4234/4194

  • Resistance: 70.84/71.97
  • Support: 67.93/67.05

Precious metals saw selling pressure after the Federal Reserve suggested interest rate hikes. Gold prices, which closed down over 1% yesterday, rebounded above $4,300 in early Thursday trading.

Analyst View: Gold rebounded above the 10-day MA, shifting focus to resistance at the 20-day MA ($4,380). Stay alert for news of a US-Iran agreement and possible pre-holiday adjustments.

Bias: Mild rebound

  • Resistance: 52074/52335
  • Support: 51204/50998

The Federal Reserve’s updated dot plot signaled a hawkish stance, leading to a sell-off in all three major US stock indices. The Dow reversed from record highs, closing 1% lower.

Analyst View: Dow futures ended its winning streak, losing the most in a week after briefly hitting 52,200. Watch for support near the 10-day MA at 51,100.

Bias: Short-term correction

  • Resistance: 30081/30377
  • Support: 29477/29175

The Fed’s dot plot indicated a significant rise in rate hike expectations. While the semiconductor index gained, most mega-cap tech stocks fell, with SpaceX posting its first decline, leading Nasdaq to drop more than 1%.

Analyst View: Nasdaq is at key daily moving averages after two down days. Direction depends on holding support at 29,477/29,175 or dropping to 29,000.

Bias: Short-term correction

  • Resistance: 66352/67304
  • Support: 63202/62234

Bitcoin fell on Wednesday after the Federal Reserve’s hawkish update weighed on speculative assets, including cryptocurrencies.

Analyst View: BTC/USD closed lower for a second day, reaching the 10-day MA. Watch for consolidation between the 10- and 20-day MAs, with the 10-day MA as key support.

Bias: Consolidation

Enjoy trading! The content is for reference only. Please ensure that you understand the risk.

 

About the author

Martin Lam

 

Martin Lam is ATFX Chief Analyst for Asia Pacific, with over 20 years of experience in global forex and investment markets. He holds a degree in Finance and Economics from Deakin University and has held senior roles at leading FX brokerage firms.

More from Martin Lam

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.

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