What the Currency Specialists Are Predicting for the GBP/USD Rate

Do more losses lie ahead for the British pound against the US dollar? Here we ask some of the industry's leading exchange rate analysts to give their forecasts.

The GBP continues to struggle to find it's feet against the USD juggernaut in recent months. Indeed, it has been a year of two halves with the first half being dominated by sterling strength courtesy of the growing UK economy. 

However once US data recovered from a poor and weather-impacted start to the year the dollar started its long-awaited rally. Buying interest continues to grow alongside expectations for a Federal Reserve interest rate hike in mid-2015.

Forecasts for the Pound to Dollar Exchange Rate

• Ipek Ozkardeskaya at Swissquote Research:

GBP/USD continues to retrace the rebound that started from the low at 1.6052. The hourly support at 1.6162 is challenged. Hourly resistances are given by the declining channel (around 1.6252) and 1.6287.

"In the longer term, the collapse in prices after having reached 4-year highs has created a strong resistance at 1.7192, which is unlikely to be broken in the coming months.

"We favour a medium-term consolidation phase with supports at 1.6052 and 1.5855 and a resistance at 1.6644."

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• Bill McNamara at Charles Stanley:

"There is still no end in sight to the seemingly inexorable rise in the US dollar and last week’s 1.06% advance was notable for the fact that it took the index through its 2013 highs (i.e. at 84.75) and to its highest reading since the summer of 2010.

"This has now resulted in a situation where it has become hyperbolically overbought – the 14-week RSI has, for example, surged to a reading of 84.5% - and some kind of consolidation seems likely before too long.

"However, the chart is suggesting that such a period of retrenchment would be short-lived and that traders will view any weakness as an opportunity to add to long positions."

• Goldman Sachs, in a note to clients, say:

"Sterling is in a similar situation to the Dollar. It has strengthened steadily this year, rising almost 5% against its G10 peers.

"However, it remains around 8% below its historical mean, so that GBP strength has room to extend, in particular given that the appreciation of Sterling has lagged interest rate differentials."

• Societe Generale, also in a note to clients released today, forecast:

"GBP/USD that it has broken below monthly channel limit. The monthly RSI has retraced from a resistance indicating the possibility of a much deeper correction.

"The pair is poised to face further down move towards 1.60 and probably even 1.5780/20. 1.6485 should limit upside."