Exchange Rate Forecasts For the Pound Sterling, Euro, US Dollar and Aus Dollar

By Will Peters

Technical exchange rate forecasts continue to suggest momentum resides with the pound sterling, but Friday's slump in the pound dollar exchange rate is interesting.

The British pound (GBP) is in a consolidative mood on Friday afternoon, particularly against the US dollar which is doing well following the release of US NFP data. 

The Construction PMI data released in the UK meanwhile remained strong at 60.8, but consensus expected only a moderate decline from 62.5 to 62.2.

It marked the sign for some profit taking/correction away from these important technical levels ahead of the long weekend (UK markets closed on Monday).

Here are the key levels those with an eye on the currency marketplace should be keeping an eye on.

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Pound dollar exchange rate forecast

UBS say they are bullish on GBP / USD: "With the pair posting new highs, there’s scope for extension of the strength to resistance at 1.7043 and then 1.7332. Support is at 1.6763."

Craig Erlam at Alpari says Cable could be witnessing a bull trap:

"Cable is yet to see a significant break out from its trading range, although I don’t think it’s too far away. The pair did close above the 1.6840 resistance on the 4-hour chart earlier this week and looked like it was going to push on, but it failed to gain any momentum and before long was back inside the range.

"This bull trap appears to have simply delayed a move that looks more and more likely to play out. The pair has been making higher lows for the last week or so and is fast approaching that 1.6840 resistance.

"A close above here would be bullish but following the false breakout on Monday, I’d like to see a clearer close above, with Monday’s highs being broken in the process. Should we see this then the next target will be 1.69, 161.8% fib expansion."

Euro pound exchange rate forecast

UBS are bearish on euro pound saying:

"Bearish trend is intact and momentum tools are threatening to cross lower, indicating more downside potential to 0.8191 and then to critical 0.8158. Resistance is at 0.8259."

Luc Luyet at MIG Bank says:

"EUR/GBP has successfully tested the support area given by 0.8198 and 0.8191. However, a break of the resistance at 0.8259 is needed to improve the short-term technical structure. Another key resistance stands at 0.8315.
 
"In the longer term, the failure to make any follow-through after the break of the resistance at 0.8350 (06/02/2014 high) calls for caution as
prices remain below the declining 200 day moving average. A key support area stands at between 0.8168 and 0.8158.

Euro dollar exchange rate forecast

UBS warn: "The broader risk remains for resumption of weakness to test support at 1.3762. A break below this would open the way to 1.3664. Resistance is at 1.3906 ahead of 1.3967.

Craig Erlam at Alpari says:

"We’ve seen a really strong rally in the pair in the last couple of hours following a negative start to the day. The sell-off saw the 50 fib level – 4 April lows to 11 April highs – once again provide solid support for the pair. While we did see it break below, the failure to close below this level highlights how significant a support level it is.

"The rally since then has been extremely aggressive and if we see a close above 1.3850, previous resistance, would be a very bullish signal. A break above Monday’s high of 1.3878 would provide additional confirmation of this bullish outlook, with the next major level of resistance coming around 1.3905."

Australian dollar exchange rate forecast

UBS say they are neutral on the Australian dollar's prospects at this stage:

"The pair has been correcting over the past few weeks, approaching the important support at 0.9206. A breach of which would extend this
corrective phase to 0.9155. Resistance is at 0.9378."

Markets: After hours releases

A key driving theme on global FX at present are the results coming out of the US this earning season.

Here are some of the latest after-hours releases:

ConocoPhillips (COP) released 1Q EPS of $1.71 vs $1.73 last year and adjusted EPS of $1.81 vs $1.42 ($1.55 expected). 1Q production amounted to 1,530 MBOED from continuing operations, excluding Libya, an increase of 24 MBOED, (total production of 1,568 MBOED). Looking forward, the Co said 2Q "production from continuing operations, excluding Libya, is expected to be 1,490 to 1,540 MBOED."

Viacom (VIAB) announced 2Q adjusted EPS up 13% YoY to $1.08 ($1.05 expected) on revenues up 1% to $3.2B. Media Networks revenues increased 6%, to $2.38B.

American Tower (AMT) posted 1Q adjusted EPS up 18.6% to $0.51 on total revenue up 22.6% to $984.1M. The Co anticipates FY14 net income to be $820M to $850M.

Mylan (MYL) reported 1Q adjusted EPS up 6% YoY to $0.66 on total revenues of $1.72B, up 5% YoY. The Co reaffirms FY14 adjusted EPS guidance range of $3.25 - $3.6.