Profit Forex Signals

February 14, 2018

Riksbank expected to remain on hold today

Riksbank is expected to announce it’s interest rate decision today and is expected to remain on hold at -0.5%. SEKOIS imply that the market has priced in Riksbank to remain on hold with a probability of 85%. Financial data and fundamentals support the case for the bank to remain on hold as well. Specifically, the inflation rate is currently at +1.7% yoy, below Riksbank’s target of +2.0% yoy and unemployment is at 6.0% evident of the existing slack in the labour market. On the fundamental side, Sweden maybe facing a housing bubble with Riksbank trying to achieve a “soft landing” of the prices. Hence, focus may shift to the accompanying statement and the press conference. The tone is expected to be neutral, maybe even a bit dovish. SEK could be weakened by the developments and some volatility could be expected upon the announcement of the rate decision.

EUR/SEK has been trading in a sideways manner the past few days, well between the 9.8594 support line and the 9.9716 resistance line. We see the case for the pair to trade sideways with a bullish sentiment in the short term, due to the fundamentals mentioned before. Should the bears get in the river’s seat, we could see the pair breaking the 9.8594 support line and aim for the 9.8035 support zone. On the other hand should the bulls take the reins, we could see the pair breaking the 9.9716 resistance line and aim for the 10.0300 resistance hurdle.

February 13, 2018

BoE to hike rates earlier?

Ian McCafferty, MPC member, stated on Monday that it’s likely borrowing costs will rise earlier than previously thought. Main reasons cited for an earlier rate hike were that growth “is holding up” and inflation is “significantly above the target”. We see the case however that the rate hike path for the BoE, may be influenced by the progress of the Brexit negotiations. Currently the market seems to price in the probability for the next rate hike in early August according to GBPOIS. The UK CPI rate which is expected to be released today could play a decisive role as to the markets expectations. Overall, we see the case for the GBP to strengthen in the short term, as market expectations may grow.

Cable moved in a sideways manner yesterday between the 1.3750 support line and the 1.4040 resistance line. We see the case for the pair to continue to trade in a sideways manner however it may gain momentum and have some bullish tendencies, subject to the release of the UK financial data today. Should the pair find buying interest, it could break the downward trend line incepted since the 2nd of February and reach the 1.4040 resistance line. Should the pair find selling orders, it could break the 1.3750 support line and aim for the 1.3590 support zone.

February 13, 2018

Worries for stock markets fade away

The three major indexes of Wall Street rebounded on Monday, indicative of investors regaining at least some confidence in the stock market. Analysts considered the “weekend” effect as the market had a calmer review of the market, gaining faith in a strong economy. The release of US government budget, including infrastructure spending temporarily helped sectors such as materials and industrials. We see the case for the CPI data release tomorrow to play a major role on further stabilization of the market. Overall, it could be the case that the US Dollar may weaken in the short term as further confidence is added to the stock market.