Daily Forex Highlights – Jun 22 – UK political drama; USD supported by hawkish Fed bets

📌 What Moves Markets Today

UK Prime Minister Starmer is expected to announce his departure timeline today, though a cabinet minister has denied the reports. Political uncertainty is weighing on sterling. Meanwhile, the dollar remains supported by firm Fed rate expectations. USD/JPY is holding near 161.50 as intervention talk caps further upside.

🔴 Bearish for GBP on political risk.

🟡 Neutral for USD as markets wait for clearer Fed signals.

🔴 USD/JPY upside is limited by intervention risk.

🔥 Quick Takes

Dollar

- CME FedWatch: 61.5% probability of no rate change in July → Markets are leaning toward a hold. No urgency to move.

Euro

- ECB's Escriva: Need to watch for second-round effects from wages → A hawkish concern. Wage pressures could keep inflation sticky.

Pound

- UK media: Prime Minister Starmer expected to announce departure timeline today → Political uncertainty is rising. Sterling could face pressure.

- UK trade minister Kyle: No reason to believe reports that Starmer will resign Monday → Denying the media reports, but uncertainty remains.

Yen

- BOJ Deputy Governor Himino: Expects accommodative policy environment to continue → A dovish signal. The BOJ is not rushing to tighten.

- PM Takaichi: Expects the BOJ to coordinate closely with the government to achieve the 2% inflation target → Government pressure for a dovish stance.

- Finance Minister Katayama: Will not comment on specific FX levels; ready to take appropriate action on currency moves → Verbal intervention. Markets are on notice.

- BOJ power shift: Takaichi's personnel moves could change the rate hike path → A political overlay. The BOJ's independence may be tested.

- OCBC: The yen is unlikely to become an investment currency unless the BOJ turns more hawkish → A structural view. The carry trade remains attractive.

Other

- Reuters poll: All 28 economists expect Bank of Thailand to hold rates at 1.00% on June 24, and for the full year → A unanimous dovish view. No hikes expected.

- Iran central bank governor: FX reserves increased by $4.5 billion during the war → Reserves are growing. A sign of stability despite conflict.

- Kuwait CPI: +0.07% month-on-month, +2.49% year-on-year in May → Inflation remains contained.

- Korea trade surplus: $17.5 billion in June 1-20; exports +60.4% year-on-year, imports +23.2% → A huge surplus. Strong export momentum.

- Malaysia economy ministry: If the Gulf crisis continues, will prioritize projects under the 13th Malaysia Plan to support recovery → Fiscal support is on standby.

- Thailand finance minister: Expects growth potential to rise from 2.7% to 3% by 2030 → A positive long-term outlook. The baht may find support.

💡 Technical Analysis

Source: Investing.com – Prices as of Jun 22, 2026

EUR/USD – 1.1400

Resistance: 1.1575-1.1580, 1.1600, 1.1638 (200-period SMA)

Support: 1.1500, 1.1400

The pair is under pressure, trading toward 1.1400 on Monday. Concerns over the US-Iran peace deal and expectations of higher US rates are keeping the dollar supported. Technically, price remains well below the 200-period SMA on the 4-hour chart, keeping the near-term bias bearish. MACD is negative. RSI is around 38, suggesting downside pressure remains intact. A break below 1.1500 would open the door to further weakness toward 1.1400.

USD/JPY – 161.50

Resistance: 160.73 (April 30 high), 162.00

Support: 159.70 (20-day EMA), 158.60 (May 20 low)

The pair is holding mild gains near 161.50. The bullish near-term bias remains intact as price holds above the 20-day EMA at 159.69. RSI around 58 suggests firm but not overstretched upside momentum. However, intervention risks are capping further upside. A break below 159.70 would signal fading momentum.

GBP/USD – 1.3300

Political uncertainty is the key driver for sterling. Any confirmation of Starmer's departure could trigger a sell-off. Technical levels to watch:

support at 1.3300, resistance at 1.3450.

🔮 What to Watch This Week

- 🇬🇧 UK political situation – will Starmer actually step down?

- 🇺🇸 Fed speakers – any shift in tone?

- 🇹🇭 Bank of Thailand decision – hold expected

- 🇯🇵 BOJ – any hints on the rate path?

- 🇰🇷 Korea trade data – can export momentum continue?