Forex Signals Brief June 16: BOJ, Fed, BOE, SNB Meet, but Eyes on Middle East

Quick overview

This week’s forex calendar is packed with critical central bank decisions and inflation reports, but ongoing tensions in the Middle East will continue to overshadow fundamentals in the short term.

Inflation Data Cools, But Geopolitical Tensions Reignite Volatility

Last week began with a focus on U.S. inflation figures, which initially painted a more moderate picture. Both May’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports came in below expectations, softening the U.S. dollar and offering temporary support to equity markets. This trend continued on Thursday with University of Michigan inflation expectations, which dropped from 7.5% to 5.1%, signaling a potential decline in long-term inflation pressures.

However, optimism was short-lived. By Thursday night, global focus shifted sharply as Israel launched a missile strike on Iran, prompting an immediate and extended retaliation. The weekend was marred by continued military action and significant casualties on both sides, causing safe-haven assets like gold and crude oil to spike, while stock markets turned red.

Markets Turn Red Across the Board

Global equities felt the heat, with U.S. and European indices declining more than 1% across the board. Bond yields, which had initially opened the week high, stabilized by Friday, reflecting investor uncertainty rather than panic.

This Week’s Forex Market Events: Central Banks, CPI & Sentiment Watch

While inflation and rate decisions from major economies will guide forex moves this week, market reactions may remain muted or choppy due to ongoing geopolitical risk aversion. If violence escalates further, safe-haven demand could overwhelm fundamentals in the near term, particularly for USD, CHF, and gold.

Market Mood: Geopolitical Tensions Linger

• Despite intense fighting in the Middle East over the weekend, markets remain relatively unchanged from late Friday levels.
• Risk sentiment remains fragile, with investors cautious ahead of key data and central bank updates.

Tuesday: Retail Sales & BOJ in Focus

• Bank of Japan (BOJ) is expected to hold its policy rate steady at 0.50%, as inflation remains subdued and the yen stabilizes.
• U.S. Core Retail Sales (May) forecast to rise 0.2%, slightly above April’s 0.1%, suggesting moderate consumer strength.

Wednesday: CPI & Fed Pause Likely

• UK Consumer Price Index (CPI y/y) expected to cool from 3.5% to 3.3%, indicating further progress on inflation.
• U.S. Federal Reserve anticipated to leave interest rates unchanged at 4.50%, maintaining a cautious stance amid mixed inflation signals.
• New Zealand Q1 GDP likely to stay at 0.7%, supporting expectations of a soft economic landing.

Thursday: Swiss and UK Rates on Deck

• Swiss National Bank (SNB) expected to cut rates from 0.25% to 0.00%, continuing its dovish shift.
• Bank of England (BOE) forecast to hold the Official Bank Rate at 4.25%, as UK inflation continues to ease gradually.

Friday: UK Retail Sales Could Disappoint-

• UK Retail Sales MoM (June) projected to decline -0.5%, reversing April’s sharp 1.2% rise, potentially reflecting consumer fatigue or weather-related factors.

Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD jumping above 1.16 but returned back below 1.15, while stock markets retreated on Friday. The moves weren’t too big though, and we opened 35 trading signals in total, finishing the week with 23 winning signals and 12 losing ones.

Gold Rallies as Safe-Haven Demand Surges

Gold (XAU/USD) found strong support at the $3,250 level, buoyed by key moving averages. The price rebounded firmly and closed above $3,400 on Friday, with traders now eyeing a possible retest of April’s record highs above $3,500. Given the geopolitical instability and declining real yields, the path to new all-time highs appears open.

The 50 SMA Rejects USD/JPY

In the foreign exchange markets, the USD/JPY pair saw an unusual move, climbing from 143.40 to 144.31. This wasn’t driven by interest rate differentials, but rather by capital outflows from Japan, likely tied to rising geopolitical risks and global portfolio reshuffling. Analysts suggest that flow-driven pressures are increasingly outweighing traditional macroeconomic drivers.

USD/JPY – Daily Chart

Cryptocurrency Update

BTC Joins the Flight to Safety — With Caution

Bitcoin (BTC) surged past the $110,000 mark earlier in the week, gaining over 6% as investors sought non-traditional safe-haven alternatives. However, the rally stalled at the 20-day moving average, and BTC fell back toward $100,000 amid profit-taking and broader market uncertainty.

BTC/USD – Daily chart

Ethereum returns Below MAs

Meanwhile, Ethereum (ETH) outperformed, benefiting from the successful rollout of the Pectra upgrade. This technical advancement enhanced wallet usability and improved staking systems, fueling renewed institutional interest. ETH has climbed over 20% since April, although the 200-day moving average remains a stubborn resistance, capping the most recent breakout attempt.

ETH/USD – Daily Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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