Exchange Rate Forecasts Updated: Pound Sterling Sees Technical Momentum Return

We are starting to see technicals turn more bullish for the pound and US dollar while the opposite appears to be true for the Euro.

Regarding sterling's outlook, an analysis at Swissquote Bank shows:

"Although the technicals have been bearish over the past weeks, the supportive news out of UK today has the power to reverse trend in the Cable to bullish.

"Option offers are seen at 1.6650, option bids are to be tipped above 1.6685/1.6700 region. EURGBP pulled out our 0.83915 Fibo-target, yet failed to clear resistance above 0.84000. Waiting for more good news out of UK, traders continue seeing opportunity on the short side of the play."

Pound dollar forecast for today

"The recent setback doesn’t change the bullish picture as long as support holds at 1.6537. Resistance is at 1.6718 ahead of 1.6878." - UBS.

"The GBP-USD fell through 1.6600 as the EUR-GBP firmed to test 0.8400 on cited M&A flows. For today, the pound has a lot to contend with as labor market numbers, the budget announcement, and BOE MPC minutes. In the interim, expect the pair to remain laden and if 1.6600 is breached, the next support only comes in at the 55-day MA (1.6548)." - Emmanuel Ng at OCBC Bank.

Euro pound forecast for today

"The important bullish development was the close above resistance at 0.8392. This confirms the recent strength opening the way to 0.8467. Support is at 0.8321." - UBS.

"We remain moderately positive on sterling longer term. Short-term, we need a technical sign that the current rebound in EUR/GBP has run its course." - KBC Markets.

Euro dollar forecast for today

(Be sure to check out our latest entry on EUR-USD at our daily FuturesTechs forecast section).

"For now, we maintain the view, that 1.4000 remains a high hurdle for EUR/USD. The ECB will probably give further warnings on the impact of a stronger euro in case of a break higher." - Piet Lammens at KBC Markets.

"With bullish conditions in place, there’s more upside potential to test the critical resistance at 1.4052. Any setbacks in the interim will be corrective and limited to support at 1.3834 and then 1.3780." - UBS.

"The EUR-USD was initially hampered by a disappointing German march ZEW reading but the pair managed a subsequent recovery to end slightly higher on the day as Ukraine tensions eased slightly. Near term, our view on the pair remains unchanged and expect initial resistance around 1.3970 while support may emerge around the 1.3900/15 area." - Emmanuel Ng at OCBC Bank.