GBP slides as UK inflation comes in line – Preparing for Bank of England rate decision

[Redator]

The Forex currency board is showing some undoing of yesterday’s action that had given a decent rebound in the US Dollar versus other currencies. However, that correction was insufficient for GBP bulls to push the Sterling back to its weekly highs.

The Pound has dropped as UK Inflation data comes in line, shy of a slight miss on the Core Inflation. Markets were moved by some major geopolitical shifts and that hasn't led to much appreciation for the GBP.

As a reminder, Markets will see the release of the Bank of England rate decision at 7:00 A.M. with close to 10% chance of a cut priced in – BoE Speakers haven't hinted towards more cuts until the latter part of Summer 2025. Also, don't forget the upcoming FED Rate decision at 14:00 P.M. E.T today!

UK Inflation and Retail Price data – Source: Marketpulse Economic Calendar

After a significant rise in April, the data showed minimal easing in the year-over-year statistics. You can access the full report here.

The Core print shows 3.5% vs 3.6% expected, although the data is closer to 3.6%. In parallel, the UK Office for National Statistics also released the Retail Price Index, which also came in line.

Let’s take a look at zones of interest for the Quid through a multi-timeframe GBP/USD technical analysis.

GBP/USD Multi-timeframe analysis from the Daily to Hourly charts

GBP/USD Daily Chart

GBP/USD Daily Chart, June 18, 2025 – Source: TradingView

The Pound has started to correct within it's Ascending Daily channel in a strong bearish Daily Candle.

Having just breached the middle line, probabilities are higher for a retest of the lower band of the Channel, currently situated around the S2 Support Zone between 1.3260-1.33

However, until it concretely breaks the 2024 Highs (1.3410) that bulls precedingly used as support, the price action is more rangebound than fully bearish, with the Daily RSI right at the middle, neutral level.

Prices would also have to break the Daily 50-Period Moving Average, situated at 1.3380 before the correction gets confirmed.

Let's take a closer look.

GBP/USD 4H Chart

GBP/USD 4H Chart, June 18, 2025 – Source: TradingView

GBP/USD rejected the 1.36 Resistance Zone after testing that level several times in the beginning of June and has corrected close to 2 full handles in a matter of 2 trading sessions.

Prices are attempting a rebound on the aforementioned 2024 highs that also coincide with the 1.34 Support Zone, further supported by the 4H MA 200 coming in, with the 4H RSI also bouncing from oversold levels.

Price action has potential to consolidate around these levels in the upcoming hours as markets are still bracing for the upcoming adjustment (or lack thereof) of the US Federal Funds Rate.

GBP/USD 1H Chart

GBP/USD 1H Chart, June 18, 2025 – Source: TradingView

Bulls are trying their best to mean-revert some of the losses incurred in the Sterling though it seems that they are stepping into a wall between 1.3465 and 1.3473 (session highs).
It seems that the Hourly MA 50 (1.3510) and 200 (1.3537) could be zones of interest for an upward retracement, which also coincides with the middle line of the Daily Channel.

That wall is not only technical but also fundamental, as price action tends to consolidate ahead of major events such as the FOMC, and tomorrow's BoE Rate Decision.

Until the FED decision, it would be surprising to see any new session lows as sellers would also be covering their positions.

Stay in touch with the headlines as all markets are looking at the Israel-Iran conflict updates, with Oil making strong moves in the morning session.

Safe Trades ahead of the upcoming Central Bank decisions!

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