SEARCH

Pound and Euro Forecast Lower vs US Dollar as US Fed Points to mid-2015 Interest Rate Hike

exchange rate forecasts for EUR USD and GBP

Pound Sterling Live's latest roundup from the world of foreign exchange research brings you forecasts and news for the British pound (GBP), US dollar (USD) and Euro (EUR).

The USD has shot higher against most of its counterparts as we head into the final stages of the month as the US Fed steps up and tells markets it is happy with the direction being seen in the US economy. For the latest report on the matter, please see here. 

Meanwhile, sentiment in the Eurozone has improved remarkably over recent days; particularly since the release of news that only eight of the twenty-five major European banks failed the most recent round of stress tests conducted by the ECB.

These moves could provide a good opportunity for traders and money transfer watchers as they go against longer-term trends - we explore what these trends are in this article.

First, The Latest Exchange Rates for reference:

  • The pound to euro exchange rate (GBP/EUR) is 0.26 pct higher on a day-to-day basis. The conversion is 1 GBP = 1.2705 EUR.
  • The euro to dollar exchange rate (EUR/USD) is 0.49 pct lower, the conversion is 1 EUR = 1.2576.
  • The pound to dollar exchange rate (GBP/USD) is 0.24 pct higher, the conversion is 1 GBP = 1.5976.

Note: To ensure you receive the best possible rate ensure your FX provider has put the relevant buy and stop-loss orders in place to ensure you take advantage of market movements, find out more here.
Note 2: The above levels, and all rates quoted here, are from the inter-bank markets - your bank will affix a spread at their discretion when passing on a retail rate. However, an independent provider will seek to undercut your bank, thereby delivering up to 5% more FX in some instances. Please find out more.

Euro to Pound Forecast:

  • Piet Lammens at KBC Markets:

"Of late, we had a sell-on upticks approach for EUR/GBP. We maintain the view that the trend in EUR/GBP stays downward longer term. Short-term, the trend shows some signs of fatigue.

"The 0.7850/0.7755 is a tough support short-term. Important resistance stands around 0.8066. We take a more neutral approach on the EUR/GBP cross rate short-term.

  • Luc Luyet at Swissquote Markets:

"EUR/GBP has declined after its successful test of the key resistance at 0.8034. The short-term technical structure remains weak as long as prices remain below the hourly resistance at 0.7942 (21/10/2014 high). Hourly supports can now be found at 0.7871 (23/10/2014 low) and 0.7821 (03/10/2014 low).

"In the longer term, the underlying downtrend favours a test of the major support area between 0.7755 (23/07/2012 low) and 0.7694 (20/10/2008 low) at minimum. A decisive break of the resistance at 0.8034 (25/06/2014 high) is needed to suggest some exhaustion in the medium-term selling pressures."

Pound to Dollar Forecast:

  • Karen Jones at CommerzBank:

"GBP/USD is attempting to recover off 1.6000. However immediate resistance is offered by the 23.6% retracement at 1.6184 and just ahead of the here lies the downtrend at 1.6167 today.

"While capped here, a negative bias remains. We continue to target the 1.5855 November 2013 low. Beyond this we look for losses to 1.5721 the 61.8% retracement of the move from 2013.

  • Luc Lluyet at Swissquote Markets:

"GBP/USD has bounced near the hourly support defined by the 61.8% retracement (1.5995). However, the technical structure favours a bearish bias as long as prices remain below the resistance area between 1.6184 (21/10/2014 high) and 1.6227. Another support stands at 1.5877.

"In the longer term, given the significant deterioration of the technical structure since July, the strong resistance area between 1.6525 (19/09/2014 high) and 1.6644 (01/09/2014 high) is expected to cap any upside in the coming months. Monitor the current consolidation phase near the strong support at 1.5855 (12/11/2013 low)."

Euro to Dollar Forecast:

  • Piet Lammens:

"The technical picture of EUR/USD deteriorated after the break below the key 1.2662 support level (Nov 2012 low). We have a LT negative bias on EUR/USD. The trend is intact, but the price action over the last two weeks suggests that the market was too long USD.

"In the meantime, dollar overbought conditions have been worked off. The 1.2043/1.1877 support is the next LT target, but a drop below 1.25 is needed before the picture becomes again dollar bullish ST. A re-break above 1.2995 would be really significant and question longstanding EUR/USD downtrend. This is not our preferred scenario though.

  • Karen Jones:

"EUR/USD held the initial test of the 1.2605 support last week and has seen a minor rebound. This has been enough to neutralise the intraday indicators and we suspect some further near term ranging will be seen. Last week the market has recently charted an outside day to the downside and severed its short term uptrend.

"This suggests that the market should eventually come under pressure. We target the 1.2500/1.2460 supports (recent low and 78.6% retracement)."

  • Luc Luyet:

"EUR/USD needs to break the hourly resistance at 1.2743 to alleviate concerns of a quick decline towards the key support at 1.2501. Another resistance stands at 1.2845 (16/10/2014 high), while an hourly support can be found at 1.2614 (23/10/2014 low).

"In the longer term, EUR/USD is in a downtrend since May 2014. The break of the strong support area between 1.2755 (09/07/2013 low) and 1.2662 (13/11/2012 low) has opened the way for a decline towards the strong support at 1.2043 (24/07/2012 low).

"As a result, the recent strength in EUR/USD is seen as a countertrend move. A key resistance stands at 1.2995 (16/09/2014 high)."

Theme: GKNEWS