Pound dollar exchange rate forecast: Where next after Thursday's big upside rejection

We present the latest pound dollar exchange rate forecast issued by the team at FuturesTechs.

In their latest forecast on the Cable, analysts at FuturesTechs say:

• Short Term Trend: Neutral
• Medium Trend: Bullish
• Candlestick Chart says: A big upside rejection yesterday and now we’re back at key short term Fib’ support at 1.6606.
• Profile Charts says: We are at the bottom end of the recent “Bracket” and should see a reaction lower if this area breaks.
• Summary: Chopping about but possibly getting ready for a move lower if we finally see of 1.6605 properly.

Pound exchange rate complex under pressure

There was again little important news out of the UK yesterday, though this didn’t prevent any remarkable swings in cable and EUR/GBP.

An analysis issued by KBC Markets today says:

"Initially, the euro stayed well bid, pushing EUR/GBP further north in the 0.83 big figure.

"Later in the session, a cable short squeeze pushed the pair higher in the 1.6584/1.6823 trading range.

"This rebound in sterling and comments from ECB’s Draghi that the valuation of the euro is becoming increasingly relevant in the ECB assessment of price stability finally pushed EUR/GBP back below the 0.8350 previous range top."

Looking ahead, Later today, the UK trade balance data will be published.

"A substantial rise in the deficit is expected. In theory, this is a negative for sterling. However, we have the impression that the focus of markets and of sterling traders will be on global factors. Even so, a poor figure can be a factor to push cable for a test of the 1.6584/69 range bottom," say KBC Markets.