Forex Market: GBP/SEK daily trading forecast

Yesterday’s trade saw GBP/SEK within the range of 11.7425-11.8730. The pair closed at 11.8124, gaining 0.47% on a daily basis.

At 7:43 GMT today GBP/SEK was down 0.17% for the day to trade at 11.7912. The pair touched a daily low at 11.7884 at 7:44 GMT.

Fundamentals

United Kingdom

Industrial, manufacturing output

Annualized industrial production in the United Kingdom probably expanded 1.8% in October, following a 1.5% gain during the preceding month, which has been the slowest pace of increase since June. In monthly terms, industrial production probably increased 0.2% in October. The index measures the change in the total inflation-adjusted value of production in sectors such as manufacturing, mining and energetics.

United Kingdom’s annualized manufacturing production, a short-term indicator which accounts for almost 80% of nation’s industrial output, probably expanded 3.2% in October. In September manufacturing output rose at an annualized pace of 2.9%, or the least since June. In monthly terms, production probably increased 0.2% during October. As it is a key component of the country’s Gross Domestic Product, in case manufacturing production expanded more than projected, this would have a bullish effect on the sterling. The Office for National Statistics (ONS) will release the official industrial data at 9:30 GMT.

Rate hike and BoE stress tests

Bank of England Governor Mark Carney has said the increase in borrowing costs from the current all-time low of 0.5% is likely to be gradual and limited, while the peak in rates – lower compared to previous cycles. In its stress tests of the eight largest lenders in the United Kingdom, the BoE projects a rate increase to 4% by the end of next year. These tests are expected to be the first in Europe to take into account monetary policy actions. Stress test results are to be released on December 16th.

“You could argue that going to 4 percent is against their own policy,” said Charles Goodhart, a former member of the Bank of England’s Monetary Policy Committee and a professor at the London School of Economics, cited by Bloomberg. “I think it’s actually quite courageous, and better than the ECB did, to include in the scenario a feature which in some sense is against their current policy.”

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 11.8093. In case GBP/SEK manages to breach the first resistance level at 11.8761, it will probably continue up to test 11.9398. In case the second key resistance is broken, the pair will probably attempt to advance to 12.0066.

If GBP/SEK manages to breach the first key support at 11.7456, it will probably continue to slide and test 11.6788. With this second key support broken, the movement to the downside will probably continue to 11.6151.

The mid-Pivot levels for today are as follows: M1 – 11.6470, M2 – 11.7122, M3 – 11.7775, M4 – 11.8427, M5 – 11.9080, M6 – 11.9732.

In weekly terms, the central pivot point is at 11.7501. The three key resistance levels are as follows: R1 – 11.8780, R2 – 11.9784, R3 – 12.1063. The three key support levels are: S1 – 11.6497, S2 – 11.5218, S3 – 11.4214.