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Buying or Shorting GBP/SEK? Technical support & resistance

February 6, 2021 23:14
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GBP, GBP/SEK, sek,

Today, Short Selling will discuss the latest important news and technical analysis connected with GBP and Swedish krona. This currency pair is advancing last several weeks, but the risk of decline is still not over.

The Bank of England left its monetary policy unchanged last week and cooled hopes for negative rates. After conducting a study, the central bank concluded that it would take six months for the financial sector to prepare for a sub-zero rate cut, and this gave further support for GBP.

The latest from Bank of England

BOE's Deputy Governor Dave Ramsden said that the Bank of England would complete its 150 billion pound program this year and slow purchases to meet its target. The situation around Covid-19 in the UK keeps improving, as vaccination speeds up while the number of new cases decreases. After a peak of almost 70K contagions per day, the number of daily new cases averaged 20K last week, taking off some pressure on the health system. More than eight million people in the UK had already gotten their first dose, leaving the UK among the top-three larger vaccinated nations. Despite this, Great Britain will remain in lockdown until at least March 8, when schools are expected to reopen.

The Swedish Riksbank monitor the markets

On the other side, the Riksbank is also carefully monitoring the financial markets' situation and the development of the economy, both internationally and in Sweden. Sweden's currency gained ground against all its major rivals last year as Riksbank held firm in 2020 compared to many other major central banks. The Riksbank has lots of measures to support the Swedish economy in this pandemic environment, and it continues to help to facilitate access to credit and liquidity. It is also important to say that Sweden had a unique approach to the covid pandemic fight, which helped the country to avoid the worst of the labor market disruption seen in other developed economies. SEK been improving for months and now you can trade it at Capital!

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Technical analysis

The GBP/SEK is advancing last several weeks, this currency pair is trading again above the 11.400 support level, but the risk of another decline is not over yet. The main trend of this currency pair remains bearish, and there's a high probability that the krone's strength and GBP weakness will come back again. One of the easiest ways to buy or short GBP/SEK is through one of our listed brokers.

The global political tensions also have a big influence on this pair, and the pair needs to jump above the 11.600 level to extend moves higher. I marked support and resistance levels – 11.600, 11.800, and 12.000 represent the current resistance level; 11.400 and 11.200 are the current support levels on this chart. If the price jumps above 11.600, it would probably reach the 11.800 level very soon; the next target could be located around 12.000. If the price falls below 11.400, that could be a very good opportunity for the short- term traders; short-term traders can put the stop loss at 11.420 and take profit at 11.370 or below.

Conclusion of GBP/SEK

The GBP/SEK has advanced above 11.590 last trading week, but the risk of declines is not over yet, and the major trend is still bearish (downtrend). The Bank of England left its monetary policy unchanged last week and cooled hopes for negative rates. After conducting a study, the central bank concluded that it would take six months for the financial sector to prepare for a sub-zero rate cut, and this gave further support for GBP. The situation around Covid-19 in the UK keeps improving, as vaccination speeds up while the number of new cases decreases. The risk factor for the Swedish krona is the fact that Per Jansson, a member of the Riksbank, has also discussed the negative interest rates. He is opening up for negative interest rates again if in case he manages to get more on his side, the krona might decrease in value drastically against the GBP. You can go long or short with the krona at Skilling, just a few clicks away.

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