Pound Sterling Forecasts: GBP Remains Positive vs EUR, AUD and USD Exchange Rates

The latest exchange rate forecasts at hand continue to advocate for more gains by the British pound against the US dollar, however sideways action against the euro and losses vs the Aus dollar could be possible.

The sterling exchange rate family remains in top form with dips staying shallow, a sign of a currency with fundamentally firm levels of underlying support.

Tuesday's reaction to the release of the latest round of UK GDP data was important for those hoping for higher levels in the pound sterling. The data release missed the mark and sterling went lower.

However, subsequent recoveries, particulalry against the euro prove that there remains underlying support for the UK unit and this ensures the outlook remains positive. Here we consider some of the key technical levels to keep an eye on.

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Pound dollar exchange rate weekly forecast: Can a Test of 1.7 occur?

With the Cable at inter-year highs, Lloyds Bank Research tell us:

"GBP/USD failed to break the 1.6842 high despite a few attempts last week. Domestic data over the coming week will provide a further update over the growth outlook for the first half of the year. The preliminary estimate of Q1 GDP tomorrow will be the key focus; market is expecting growth to have accelerated to 0.9% q/q.

"April's manufacturing PMI on Thursday will also be of interest and may set the tone for expectations for Q2. GBP/USD will largely depend on key releases from both the UK and US this week. There are risks we could see a break of the recent high; however, we suspect we would need to see either stronger UK or weaker US data to trigger such a move."

Arek Okrasa at Tradenext says:

"The bulk of this week`s risk events come on Wednesday with US ADP Employment, FOMC rate decision and EU CPI estimates, and Friday sees the latest US nonfarm payrolls report. Having these events in mind, investors may benefit from the bullish flag formed on GBP/USD 4 hour chart (See provided image).

"The first candle which closes above 1.6830 levels will bring the potential for the currency pair to reach 1.6877 and 1.6947 respectively. However any close below 1.6755 before 1.6830 is reached, may suggest change in the uptrend or at least indicates a correction to 1.6697."

Euro pound exchange rate forecast

Turning to the euro pound rate, Piet Lammens says the EUR/GBP could be a sell target:

"EUR/GBP again tested the 0.82 pivot last week but a break didn’t occur. While the sterling momentum is constructive, a sustained break below the 0.8200/0.8157 support will be difficult without high profile news from the UK or Europe. We keep a sell‐on‐upticks bias for EUR/GBP."

ICN Financial give the following technical euro forecast:

"The pair did not offer strong movement in the past few sessions and continues to fluctuate around 0.8230 areas. We have a minor positive formation and the pair must breach 0.8245 to active the pattern that offers positive support that will extend gains for the pair.

"In general, we still favour the extension of the upside move over intraday and short term basis with stability above 0.8160 targeting 0.8410 then 0.8500."

Pound sterling to Aus dollar forecast

Against the Australian dollar the British pound could be in for renewed selling pressure.

Professional trader Sean Lee at FXWW says:

"Not really my side, (although I still like the long AUD play overall), but I’m still hearing some very strong arguments from professional traders for this pair to go lower.

"There is short-term support now near 1.8030 and resistance is firming near a 38.2% retracement level at 1.8140. If you are a GBP/AUD bear, then I’d look to play this range with a bearish bias."