Today's Exchange Rate Outlook: Pound Sterling, Euro, US Dollar and Australian Dollar Technicals to Lead the Way

By Rob Samson

The outlook for those major exchange rate pairings that we follow here at Pound Sterling Live.

The British pound (GBP) is bullishly aligned on the currency markets after a strong weeks trade. Friday is seeing further positive price action and as the below forecasts show further gains are possible for the GBP.

Elsewhere, "The FX traders are likely to end the week as USD-sellers. The new Fed Chairwoman Yellen’s dovish tone in her first semi-annual testimony before the Congress (Tue) combined to the weakness in US retail sales (Thu) pulled the DXY index to 80.102 this morning, the lowest since January 2nd," notes Ipek Ozkardeskaya at Swissquote Research.

The US 10-year government bonds yield below the 100-day moving average. The broad based weakness in USD helped the GBP/USD to extend gains to fresh year-highs this week.

EUR gained on supportive GDP figures. The Aussie broke over 0.9000 on supportive risk sentiment.

We lean on the following technicals:

(Note: All FX quotations seen here refer to the wholesale interbank markets. Your bank will affix a discretionary spread when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering up to 5% more currency. Learn more here.)

Pound dollar exchange rate outlook

Luc Luyet at MIG Bank:

"GBP/USD continues its streak of strong daily advances. The key resistance at 1.6668 is challenged. Another resistance can be found at 1.6747. The short-term technical structure remains positive as long as the support at 1.6600 holds. Another support can be found at 1.6511 (intraday low).

"In the longer term, the technical structure favours a bullish bias as long as the support at 1.6220 holds. A decisive break of the resistance at 1.6668 would open the way for a move towards the major resistance at 1.7043 (05/08/2009 high)."

UBS: "As bullish conditions persist, there’s scope for more upside to critical resistance at 1.6747. A break above which would open 1.6878. Support is at 1.6463."

Craig Erlam at Alpari UK:

"Sterling is looking increasingly bullish this morning having broken above yesterday’s highs before finding resistance around 1.67. Should we see a break above here, the next target will be 1.6753, the 61.8% expansion of the move from the recent retracement, which roughly coincides with the April 2011 highs. A break above here will be a clear indication that the market remains very bullish on the pair and could open up a move towards 1.70 for the first time since August 2009."

Euro pound exchange rate outlook

UBS: "The recent sharp sell-off reinforces the broader bearish picture and focus is on support at 0.8160. A close below which would be next bearish event, triggering a sell-off to 0.8082. Resistance is at 0.8300."

MIG Bank:

"EUR/GBP has sharply declined. Prices are now close to the key support at 0.8168. A break of the hourly resistance at 0.8249 (intraday low) is needed to suggest something more than a dead cat bounce.

"In the longer term, the technical structure remains negative as long as prices remain below the resistance at 0.8350 (13/01/2014 high). Monitor the support implied by the 61.8% retracement (of the 2012-2013 rise) at 0.8160. Another key support can be found at 0.8082 (01/01/2013 low)."

Euro dollar exchange rate outlook

Alpari UK:

"I must remain bearish, even though there has been a clear bullish bias since the start of this month. If we see those previous highs, which coincide with the 61.8 fib level, broken, then things would look much more bullish, with further resistance then being found around 1.38 and 1.3850, descending trend line which dates back to July 2008. If not, then a break below the most recent low of 1.3561 would confirm the continuation of the longer downtrend."

UBS: "Any further recovery will find resistance at 1.3739. A close above this would be a bullish development. Support is at 1.3562 ahead of 1.3477."

MIG Bank:

"EUR/USD rose sharply yesterday and has succeeded in making higher highs. Monitor the key resistance at 1.3739. Hourly supports are given by 1.3657 (intraday low) and the short-term rising channel (around 1.3595). Another resistance can be found at 1.3819.

"Monitor the medium-term horizontal range between the support at 1.3477 and the resistance at 1.3739. In the longer term, we favour a broad horizontal range between 1.3296 (07/11/2014 low) and 1.3893 (27/12/2013 high). A first key support is given by the 200 day moving average (around 1.3400)."

Australian dollar / US dollar exchange rate outlook

Luc Luyet at MIG Bank:

"AUD/USD has almost completely retraced its yesterday's decline, suggesting persistent short-term buying interest. Monitor the key resistance at 0.9086. Hourly supports stand at 0.8907 (10/02/201 low) and 0.8874 (05/02/2014 low).

"The long-term technical pattern is negative and favours a further decline towards the key support at 0.8067 (25/05/2010 low), as long as prices remain below the resistance at 0.9168 (02/12/2013 high, see also the 200 day moving average)."

UBS: "Fresh selling materialised from the critical resistance at 0.9086. Support is at 0.8864 ahead of 0.8730. Only a close above 0.9086 will be a major bullish development."