Exchange Rate Forecasts: GBP Strength Ahead, EUR to Decline, USD Strength Likely to Continue

The British pound (GBP) remains shaky, particularly against the dollar. Presented here are the key levels and trends to watch out for when considering the outlook.

First though, the latest spot market rates:

• The euro to dollar exchange rate (EUR/USD) is 0.05 pct higher on a day-to-day basis and is currently quoted at 1.3203.
• The pound to dollar exchange rate (GBP/USD) is 0.08 pct higher at 1.6592.
• The euro to pound exchange rate (EUR/GBP) is unchanged at 0.7959. The pound to euro is at 1.2565.

(Keep in mind that these are spot market rates to which a discretionary spread is added by your bank/provider. An independent FX provider will however guarantee to undercut your bank's offer, in some cases delivering up to 5% more FX. Please learn more.)

Pound to Dollar Exchange Rate Forecast (GBP/USD): The Credit Suisse View

Today we hear from the technical analyst team at Credit Suisse who give us the following prediction on GBP/USD:  

"GBP/USD’s early retest of the 200-day average at 1.6679 drew out renewed selling, and has seen a move to a new cycle low, reinforcing the large top.

"The immediate focus is on price support at the 50% retracement of the Nov-13/July-14 rally and price support at 1.6523/10.

"While we would expect this to hold at first, an eventual break will be expected for 1.6460, then our 1.6283/52 core target – the 38.2% retracement of the entire 2013/2014 uptrend and low for the year from February.

"Resistance moves to 1.6629 then 1.6654/57, with the 200- day average at 1.6679/80 ideally capping."

Credit Suisse are selling the pound dollar rate from 1.6650 targeting 1.6375.

Euro Dollar Exchange Rate Forecast (EUR/USD):  Bank of Tokyo-Mitsubishi UFJ Viewpoint

The euro is, as mentioned currently under pressure, and most analysts are predicting the downside to continue.

The following EUR/USD range and forecast for the next week comes courtesy of Bank of Tokyo-Mitsubishi UFJ (BTMU):

"The euro remains under downward pressure against the US dollar in the near-term falling to its lowest level since September of last year. The euro is being undermined by the deteriorating outlook for economic growth in the euro-zone.

"The loss of economic momentum in Q2 and escalating tensions between the EU and Russia is serving to undermine business confidence. The weakening economic growth outlook is encouraging speculation that the ECB will have to ease monetary policy further weighing on the euro."

BTMU retain their negative view on the shared unit.

Euro to Pound Exchange Rate (EUR/GBP) Forecast: Admiral Markets Viewpoint

While the longer-term outlook remains bearish for EUR, we note the currency has enjoyed a positive month against the British pound - could this strength be about to continue?

Not neccessarily warns an analysis issued by Admiral Markets. In a note to clients Admiral tell us:

"The pair has failed to capitalise on its strength above 0.8000 psychological mark and reversed from an intermediate horizontal resistance near 0.8030-40 area. The pair, however, has not given up significant ground and is trading near 0.8000 mark, representing 23.6% Fibonacci retracement level of its March to July 2014 down-leg.

"Although, the upward momentum seems to continue in the near-term; however, the same could be confirmed only if the pair manages to move back above 0.8030-40 resistance area. Above this immediate resistance, the pair is likely climb immediate towards its next major resistance near 0.8070-80 area, comprising of 100-day SMA and 38.2% Fibonacci retracement level.

"Meanwhile, on the downside 50-day SMA, currently near 0.7960-50 area, seems to protect immediate downside for the pair. A decisive break below 50-day SMA now seems to trigger fresh down-leg for the pair back towards 2014 daily closing lows support near 0.7890 region."