Forex Market: EUR/SEK daily trading forecast

Yesterday’s trade saw EUR/SEK within the range of 9.2418-9.2967. The pair closed at 9.2528, gaining 0.12% on a daily basis.

At 7:38 GMT today EUR/SEK was up 0.15% for the day to trade at 9.2780. The pair broke the first key daily and the first key weekly resistance levels and touched a daily high at 9.2877.

Fundamentals

Euro zone

Italian unemployment

The rate of unemployment in Italy probably remained steady at 12.6% in October. In September the number of unemployed persons was reported at 3.23 million, or an increase by 1.5% compared with the prior month. Unemployment rate among persons aged 15-24 was 42.9% in September, or down 0.8 percentage points from August, according to data by the Istat. The number of people in employment rose to 22.457 million in September, or a monthly increase by 0.4%. In case the rate of unemployment lowered, this might provide support to the common currency. Istat is to report the official rate at 9:00 GMT.

Italian Consumer Price Index (CPI) – preliminary estimate

Italys preliminary annualized consumer inflation was probably at 0.1% in November, matching the final rate of inflation for October, reported on November 13th. In October costs of education rose the most, or at an annualized rate of 0.9%, alongside costs of furnishing, household equipment and household maintenance (+0.9%) and followed by prices of clothing and footwear (+0.5%). Prices of regulated energy products fell at an annualized rate of 2.6% in October, following a 6.6% slump in September, while cost of services related to communication decreased 1.0% in October, after a 5.6% drop in the preceding month.

Key categories, included in Italys Consumer Price Index, are food and non-alcoholic beverages (accounting for 16% of total weight), transport (15%), restaurants and hotels (11%) and housing, water, electricity and other fuels (10%). Other categories are clothing and footwear (9%), furnishing and household equipment (8%), recreation and culture (8%) and health (also 8%). Communication, education, alcoholic beverages, tobacco and other goods and services comprise the remaining 15% of the index.

Nations preliminary annualized CPI, evaluated in accordance with the harmonized methodology, probably accelerated 0.2% in November, according to market expectations. If so, this would match the final HICP estimate for October, which has also been the highest since June, when annual harmonized consumer inflation was reported at 0.2%. The National Institute of Statistics (Istat) is to release the official CPI report at 10:00 GMT.

Euro zone Consumer Price Index (CPI) – preliminary estimate

The annualized preliminary consumer inflation in the Euro zone, evaluated in accordance with Eurostat’s harmonized methodology, probably decelerated to 0.3% in November, according to the median estimate by experts. If confirmed, this would be the lowest level of the HICP since September. In October the final HICP reading pointed to annual inflation rate of 0.4%, which matched the preliminary estimate. In October the highest inflation rates were reported in Austria, Finland and Germany, while Greece and Spain remained in deflation. The largest upward pressure in the regions annual inflation came from restaurants & cafés (+0.08%), rents (+0.07%) and tobacco (+0.05%). At the same time, prices of fuels for transport fell at an annualized rate of 0.17% in October, telecommunication costs were 0.10% lower and prices of heating oil were down 0.09%.

The index shows the change in price levels of a basket of goods and services from consumer’s perspective and also reflects purchasing trends. The main components of the HICP are food, alcohol and tobacco (accounting for 19% of the total weight), energy (11%), non-energy industrial goods (29%) and services (41%).

The HICP is used to evaluate and compare inflation rates between Member States, according to Art. 121 of the Amsterdam’s Agreement and directives by the European Central Bank (ECB), in order the latter to achieve price stability and the implementation of monetary policy. The HICP aggregates are calculated as a weighted average of each member state’s HICP components.

In case the HICP slowed down more than anticipated, thus, distancing from the 2% inflation objective set by the ECB, this would mount selling pressure on the euro, because of the greater possibility of introducing additional monetary policy measures in order to stimulate economic activity.

The annualized preliminary Core HICP for November probably matched the final Core HICP for October, which was reported at 0.7% on November 14th. In September the annualized core inflation was reported at 0.8%. This index excludes volatile categories such as food, energy, alcohol and tobacco. Eurostat is scheduled to release the official inflation data at 10:00 GMT.

Euro zone unemployment

At the same hour, Eurostat will announce the rate of unemployment in the Euro region for October. It probably remained steady at 11.5%, or matching the rate in June, July, August and September and also being the lowest since August 2012. The EU 28 unemployment rate was reported to have remained steady at 10.1% in September, which has been the lowest level since February 2012. According to data by Eurostat, 24.512 million people in the EU28, of whom 18.347 million were in the Euro Area, were unemployed. Compared to August, the number of persons unemployed fell by 108 000 in the EU28 and by 19 000 in the Euro zone. In comparison with September 2013, unemployment declined by 1.818 million in the EU28 and by 826 000 in the Euro zone. Unemployment among persons aged between 15-24 was at 21.6% in the EU28 and 23.3% in the Euro area, compared to 23.5% and 24.0% respectively in September a year ago.

Unemployed are considered to be all persons aged between 15 and 74, who have not been hired during the survey period, have been actively seeking employment during the past four weeks and are able to accept any job proposition right away or in two weeks time. A drop in unemployment in the region would support the single currency, as this would imply more active spending and growth respectively.

Sweden

Retail sales

Retail sales in Sweden probably rose 0.2% in October compared to September, according to expectations, following a 0.6% drop in the preceding month. In annual terms, sales rose 2.8% in September, after a 4.7% gain in August. In case the index of retail sales showed a larger improvement than expected, this would provide support to the local currency. The official data is due out at 8:30 GMT.

Gross Domestic Product

Swedish economy probably grew at an annualized rate of 2.3% during the third quarter, following a 2.6% growth in the previous quarter. The latter has been the fastest annual rate of increase since Q4 2013, when economy expanded 2.8%. In Q2 household consumption expenditures increased at a non-adjusted annual rate of 3.2%, while general government consumption expenditures rose 0.8% non-adjusted. Swedish exports grew 1.5% during the second quarter, while imports were up 3.7%. Production of goods expanded 3.3%, while service-producing industries grew 3.1%, according to the report by the Statistics Sweden.

In quarterly terms, nations Gross Domestic Product probably rose 0.2% in Q3, after it expanded 0.7% in Q2, according to the final estimate released on September 18th. In case economic growth slowed down more than anticipated, this would have a bearish effect on the krone. The preliminary GDP figure is to be released at 8:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 9.2638. In case EUR/SEK manages to breach the first resistance level at 9.2857, it will probably continue up to test 9.3187. In case the second key resistance is broken, the pair will probably attempt to advance to 9.3406.

If EUR/SEK manages to breach the first key support at 9.2308, it will probably continue to slide and test 9.2089. With this second key support broken, the movement to the downside will probably continue to 9.1759.

The mid-Pivot levels for today are as follows: M1 – 9.1924, M2 – 9.2199, M3 – 9.2473, M4 – 9.2748, M5 – 9.3022, M6 – 9.3297.

In weekly terms, the central pivot point is at 9.2508. The three key resistance levels are as follows: R1 – 9.2838, R2 – 9.3239, R3 – 9.3569. The three key support levels are: S1 – 9.2107, S2 – 9.1777, S3 – 9.1376.