Pound Predictions: GBP Forecasted to Extend Falls Against USD and EUR
- Written by: Gary Howes
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The outlook for the GBP remains unconvincing, even as Tuesday's inflation data offers a brief respite to recent declines.
Selling pressures are expected to remain as Tuesday's inflation data has exposed a lack of enthusiasm for the UK currency. As noted by Ipek Ozkardeskaya at Swissquote Bank:
"GBPUSD advanced to 1.6510, lack of further enthusiasm pulled the GBPUSD back below 1.6500. Moving forward, the GBP-selling pressures should remain as soft inflation data is supportive of BoE’s forward guidance on low interest rates. Due on Thursday, the UK retail sales are expected to witness of further slowdown in February," says Ipek Ozkardeskaya at Swissquote Bank.
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Pound Dollar Exchange Rate Forecast
In addition to the viewpoints offered by Swissquote above, consider today's trade idea from FuturesTechs.
Further, UBS advise they are neutral on Cable:
"Important support at 1.6470 was tested, a close below would be negative as it would confirm MACD’s settlement below its zero line, exposing critical support at 1.6339. Resistance is at 1.6599 ahead of 1.6684."
Craig Erlam at Alpari UK warns that the downtrend could be about to reassert itself:
"We had a bit of a correction in this pair yesterday but it ran into resistance around the 50 fib level, 5 February lows to 17 February highs, before erasing most of the days gains before the end of the session. This suggests to me that the correction is already over and we may see another move to the downside in the coming days."
Euro pound exchange rate forecast
Turning to the euro pound exchange rate, UBS say:
"With bullish trend in place, there’s scope for extension of the recent strength to 0.8405, a break above this would open the way to 0.8467. Any setback in the interim will be limited to support at 0.8308."
ICN Finacial say the outlook for the euro pound rate is positive:
"The outlook is positive for EURGBP above 0.8285 and the intraday risk-limit is below 0.8160.
"The pair has been trading positively since yesterday and approaching the critical resistance at 0.8410 that should be breached to confirm the upside move over intraday and short term basis. The wave finds support from the MA 50 & 100 targeting 0.8500 then 0.8560. Stochastic offers positive signals supporting the upside move that remains valid with stability above 0.8325-0.8285."
Euro dollar exchange rate forecast
UBS are neutral on the euro dollar:
"With both the trending and momentum indicators below their respective moving averages, there’s scope for more correction, with supports at 1.3722 and 1.3664. Resistance is at 1.3876 ahead of 1.3967.
Karen Jones at Commerzbank says:
"EUR/USD recovered yesterday, but has not done enough to restore the upmove. Last week we saw the market reverse from major resistance at 1.3958/1.40 (50% retrace of the move down from 2008) and sever its short term uptrend. We remain of the view that the market has recently topped and is likely to come under increasing downside pressure.
"Current position: Short 1.3916. Recommended trade: Stop 1.3970. Target at 1.3500."