Outlook: Pound + Euro in Short-Term Pressures, US Dollar to Strengthen Further? Exchange Rate Predictions from Swissquote Research

The euro meanwhile looks prone to declines - but what are the key levels to watch out for? Analyst Luc Luyet at Swissquote Research presents his latest technical studies.

Latest live rates for reference, automatically updated:

•  Pound / Euro exchange rate: 1.1519
• Pound / US dollar: 1.3084
• Pound / Australian dollar: 2.0807
• Pound / Canadian dollar rate: 1.8143
• Pound / New Zealand dollar rate: 2.2461
• Pound / South African Rand rate: 25.0275

Note: All quotes here are wholesale in nature; they are subject to a discretionary spread by your FX payments provider. An independent provider will guarantee to undercut your banks offer, in some instances they are able to offer up to 5% more FX. Please learn more.

Pound dollar Outlook: Long-term still positive

The relentless decline in the pound dollar exchange rate - in place since mid-July - shows no signs of fading.

However, according to Luc Luyet at Swissquote Research the longer-term picture remains constructive for GBP-USD.

"In the longer term, the break of the major resistance at 1.7043 (05/08/2009 high) calls for further strength. Resistances can be found at 1.7332 (see the 50% retracement of the 2008 decline) and 1.7447 (11/09/2008 low). A key support stands at 1.6693 (29/05/2014 low)."

Until a decisive game-changer re-establishes the uptrend expect further weakness. "In the current environment, markets may continue to fade any upticks into the 1.6900/50 zone with risks we think still skewed towards 1.6750," says Emmanuel Ng at OCBC Bank.

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Euro Pound Exchange Rate Outlook: At risk of giving back recent gains

Turning to the euro pound rate (EUR-GBP), we see the recent rally has come to an abrupt end in the near-term.

The pair was unable to break the resistance at 0.7981a and this has opened the door for further weakness.

Luyet has suggested that the inability to break and sustain resistance leaves the EUR/GBP prone to a full reversal of the gains witnessed in recent times:

"In the longer term, the break of the key support area between 0.8082 (01/01/2013 low) and 0.8065 (05/06/2014 low) opens the way for a full retracement of the rise that started at 0.7755 (23/07/2012 low). Another strong support stands at 0.7694 (20/10/2008 low).

"A break of the resistance at 0.8034 (25/06/2014 high) is needed to suggest some exhaustion in the medium-term selling pressures."

Euro Dollar Outlook: Still in an Underlying Downtrend

The euro has, through the course of the summer, been subject to the pressures exerted by a recovering dollar.

The USD has been the currency to beat in recent weeks and inevitably a look of the juice for the rally is being sucked out of the euro.

Commenting on the EUR/USD's technical outlook Luyet tells us:

"EUR/USD is bouncing within its underlying downtrend. Monitor the hourly resistance at 1.3444 (28/07/2014 high). A key resistance area stands between 1.3485 (24/07/2014 high) and 1.3503 (see also the 38.2% retracement and the declining trendline). A support can be found at 1.3367.

"In the longer term, EUR/USD is in a succession of lower highs and lower lows since May 2014.

"The downside risk is given by 1.3210 (second leg lower after the rebound from 1.3503 to 1.3700). A strong support stands at 1.3296 (07/11/2013 low). A key resistance lies at 1.3549 (21/07/2014 high)."