Exchange Rate Forecasts: Latest Euro Pound, Pound Dollar Rate Predictions

Modified: Friday, 14 March 2014 10:22 GMT
Written by: Gary Howes

We present a selection of near-term exchange rate forecasts with the main focus being the pound sterling vs the euro and US dollar.

Markets are showing distinct signs of risk aversion as traders accept the fact that the situation in the Ukraine will not have a neat solution.

As our coverage today shows, this does not tend to favour the UK unit, however the euro is certainly finding favour. The USD appears to be somewhat of a neutral play at this stage.

Below are the latest forecasts:

Pound dollar exchange rate forecast

We have already published views on the matter issued by FuturesTechs here.

In addition, analyst Axel Rudolph at Commerzbank says:

"GBP/USD slips back towards the current March low at 1.6569. On Wednesday GBP/USD briefly dipped below the late February low at 1.6585 and hit the 1.6570 level before rapidly rising on Thursday to 1.6719 to then only collapse. Immediate downside targets are seen between the one month support line at 1.6567 and the 55 day moving average at 1.6542.

"We note that the Elliott wave counts on the daily, weekly and monthly charts indicate that this is the end phase of the move and we would expect to still see the market struggle ahead of the 1.6822 February high. Having said that, we still remain unable to rule out further stabs higher and currently cannot discount a move towards 1.7041/51 (although this is not our favoured scenario). We suspect that the market will need to break back below 1.6542 (55 day moving average) in order to re-focus attention on to the 1.6259/29 support zone which remains key (September high and the 23.6% retracement of the move up from July 2013)."

"The recent setback doesn’t change the bullish picture as long as support holds at 1.6537. Resistance is at 1.6718 ahead of 1.6878." - UBS.

Euro pound exchange rate forecast

Axel Rudolph at Commerzbank says:

"On Wednesday EUR/GBP broke through the .8348/50 January/February and previous March highs and reached the .8378 level before coming off again and now trading back below the .8348/50 area. Medium term we still look for a re-test of the 55 day moving average at .8271 and the .8253 December low. Below these lies the .8231 January 9 low.

"Strong support comes in between the .8205 March 5 low and the .8159 February low. Once this has given way, the long term Fibonacci support (the 61.8% retracement of the move in 2012-2013) at .8160 will be in focus.

"We remain longer term still negative and failure at .8160 will target .8000/.7963. It is the 78.6% retracement of the move up from 2012. Only a rise above the current March high at .8378 will put the .8391 late December high back on the map. Should this level be exceeded, the 200 day moving average at .8426 will be targeted (not favoured)."

Piet Lammens at KBC Markets:

"Regarding EUR/GBP trading we look out whether the comments from ECB’s Draghi are really a game changer for the euro. The jury is still out. At the same time, we think that negative headlines on Ukraine might become a bit more important for the euro than was the case of late. It is still early days, but the topside in EUR/GBP is obviously becoming (much) tougher after yesterday’s price move."

"The cross extended its recovery and the next main resistance focus is at 0.8392. A break above which would open the way to 0.8467. Support is at 0.8321 ahead of 0.8294." - UBS.