Technical Analysis GBPSEK : 2020-02-19


Strong SellSellNeutralBuyStrong Buy

Above 12.75

Buy Stop

Below 12.25

Stop Loss

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Senior Analytical Expert
Articles 1525
RSI Neutral
MA(200) Buy
Parabolic SAR Buy
Bollinger Bands Buy

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe, the GBPSEK: D1 has already breached up the line of the ascending triangle for the second time. Not all technical analysis indicators formed buy signals. The main signal for an increase may be the exit of the chart from the triangle up. The bullish momentum may develop in case GBPSEK rises above its last fractal high, the high since December 2015 and the upper Bollinger band at 12.75. This level may serve as an entry point. The initial stop loss may be placed below the 200-day moving average line,the lower Bollinger band and the Parabolic signal at 12.25. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop level (12.25) without reaching the order (12.75), we recommend closing the position: the market sustains internal changes that were not taken into account.

Fundamental Analysis

In this review, we suggest considering the British pound against the Swedish krona currency pair. Its growth on the chart means the strengthening of the pound and the weakening of the krona. Will the GBPSEK rise?

A negative factor for the Swedish krona is the increase in unemployment in Sweden to 7.5% in January 2020 from 6% in December last year. This indicator reached the high since March 2019. This reduces the likelihood of a rate hike by the Swedish Central Bank (Riksbank) at the next meeting on April 28. Now the rate is equal to zero. Meanwhile, in December, inflation in Sweden reached 1.8% year over year and approached the target level of 2%. On Wednesday, February 19, inflation data for January will be released both in Sweden and in Britain, which may affect the exchange rate of the GBPSEK. In December, inflation in Britain was 1.3% at the rate of the Bank of England + 0.75%. The British pound shows an uptrend after the recent appointment of Britain's new finance minister Rishi Sunak. Investors believe that his budget program will support economic growth.

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