Analysts at MUFG Bank are recommending a long trade idea in the GBP/SEK cross. They see an entry-level at 11.900, a target at 12.350, and a stop-loss at 11.650.
“The fundamental case for a stronger GBP remains in place in the near-term. Key COVID metrics continue to improve in the UK supported by the successful vaccine roll out. It should allow the UK government to re-open the economy as planned in the coming months. Business confidence has already improved strongly and signals that activity should bounce back robustly. At the same time, the GBP has a tendency to outperform strongly in April which could encourage further speculative purchases of the GBP in the near-term.”
“On the other side, the SEK has been the most correlated G10 currency to emerging market equity performance. Market conditions have become more challenging for emerging markets recently as US yields have moved higher and the USD has rebounded. Developments in Turkey last weekend have provided a further challenge for emerging markets. In light of these developments, we see scope for the SEK to underperform further.”
“GBP/SEK is currently attempting to break above recent highs at around 11.900 which if broken opens the door for further upside.”
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