Global macro overview for 23/06/2017:

Hawkish comments from Kristin Forbes have hit the financial newswires. In her last speech as a member of the Bank of England Monetary Policy Committee in London Business School, Forbes reiterated that a lift in the UK interest rates should not be delayed any longer. She argued that all the reasons that justified keeping interest rates at emergency levels over the past few years are now gone or are overvalued. At the same time, the British pound's slide has changed the underlying inflationary pressures in a way that makes higher interest rates even more pressing. The sterling depreciation is the best reason why the Bank of England should no longer postpone the interest rate hike as the UK is solid enough for a rate increase on most criteria and even over-stimulated on others. She also recommended that interest rates should be changed more frequently in either direction to make monetary policy more flexible and able to respond to fresh and new economic challenges.

Last week, the Bank of England has voted to leave the interest rates unchanged at the current record low of 0.25%, but there was a shocking split vote of 5-3 (three policymakers voted to hike rates, but five MPC members wanted to leave the interest rates unchanged). Kristen Forbes, Ian McCafferty, and Michael Saunders are the three hawkish members who wanted to raise rates to 0.5% for the first time since 2011. Forbes was replaced today by London School of Economics professor Silvana Tenreyro. The new MPC member is known for her negative view of Brexit that may make her less willing to press for a rate hike now. In conclusion, the pressure to hike the interest rate among the MPC members will now decrease as a new dove has just joined the committee, so the pound decline is more likely in the nearest term.

Let's now take a look at the GBP/USD technical picture on the H4 timeframe. The price is trading in the middle of the range between the technical support at 1.2587 and the technical resistance at 1.2818. Current market conditions favor a move to the upper levels of the trading zone.