Exchange rate forecasts today: GBP a Standout, USD Mixed, JPY Recovery, AUD one way ticket lower
- Written by: Gary Howes
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Our compilation of exchange rate forecast viewpoints today confirms the British pound and US dollars as likely outperformers while the opposite can be said of the Australian dollar.
An important shift in global FX is shaping up as negative global equities and widening EM risk premiums pulled the FXSI (FX Sentiment Index) into Risk-Neutral territory for the first time in four months.
"Into the end of the week, although the USD story may continue to hum in the background, global jitters may yet persist, putting a lid on EM FX, the antipodeans, as well as underpinning the JPY intra-day," says Emmanuel Ng at OCBC Bank.
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Pound to US dollar exchange rate forecast
"The GBP remains somewhat of a standout amongst the majors in terms of its out performance. The tug of war between market expectations and the data stream on the one hand and the BOE’s forward guidance (note an attempt by the BOE’s Fisher to downplay overt market expectations of a more hawkish policy stance) on the other hand continues to ensue. Expect a firmer trading range if the pair can persist above 1.6600 multi-session." - OCBC Bank.
"The pair advanced to post new highs and next resistance focus is at 1.6747, a break above which would open 1.7043. Support is at 1.6557 ahead of 1.6451." - UBS.
Euro dollar exchange rate forecast
"EURUSD cleared resistance at 1.3595 / 1.3665 fibonacci levels and shortly spiked to 1.3705 before the European opening. The sharp pickup in EURUSD squeezed the techs. The failure to clear support at 1.3500/24 revived bets on the upside. The MACD (12, 26 day) indicator turned positive and will remain bullish for a close above 1.3640. The bias turns bullish on the option bets from next week." - Swissquote Bank.
"Today, the ECB announcement of 3Y LTRO repayments may attract some interest. The last two repayments were small, however if we see a larger repayment this could prompt EONIA to fix higher, and put some pressure on EUR/USD. Relative 2y forward points suggest this move in EUR/USD is extended and points to a move back below 1.36." - Lloyds Bank Research.
"Following the price action yesterday, the near term outlook for the pair may be turning slightly neutral if the 1.3700 ceiling is breached. Meanwhile, downside support is expected towards the 55-day MA (1.3626) and markets may continue to fade upside moves in the EUR-USD ahead of the FOMC next week." - Emmanuel Ng at OCBC Bank.
"The sharp recovery yesterday does not confirm any reversal pattern and as MACD is below its zero line, there’s scope for resumption of downtrend
to support at 1.3508 and then 1.3400. Resistance should hold at 1.3700" say UBS.
Dollar yen forecast
"USDJPY rebounded from 102.98 in New York, and failed to clear offers at 103.50/60 overnight. The bearish trend gained momentum on the downside. Option bids are seen at 102.60/80 zone, while bets are mixed between 103.00/50 area. Barriers trail above 105.00." - Swissquote Bank.
"Yesterday’s decline stalled just above support at 102.86. As broader bullish trend is in place, focus is on resistance at 104.92, a break above
which would open the way to critical 105.75." - UBS.
Ng says:
"Soggy US yields and investor jitters pulled the USD-JPY to the 103.00 late Thu/early Fri and we are increasingly negative on the pair. Immediate support is seen at the 55-day MA (103.05) and if this is violated on a sustained basis, expect further downside potential towards 102.00.
"In the interim, global risk appetite levels and the concomitant behaviour in the JPY-crosses may remain good barometers for the pair."
Australian dollar forecasts
"The overall weight of global/domestic news flow has conspired to weigh on the AUD-USD and if the pair completely loses its foothold on the 0.8800 handle, 0.8575 may beckon multi-session. To this end, we are also turning slightly more inclined towards further downside risks for the pair."- OCBC Bank.
"Options traders may consider constructing a Bear Put Spread on AUDUSD and benefit from a possible continuation of the bearish trend." - Orestis Aristides at Easy Forex.
"The pair posted a new low yesterday reinforcing the bearish picture. Support is at 0.8545, a break below which would extend the downtrend to 0.8067. Resistance is at 0.8888." - UBS.