Forex Market: GBP/NOK daily forecast

During yesterday’s trading session GBP/NOK traded within the range of 10.5550-10.6168 and closed at 10.5570, losing 0.42% on a daily basis.

At 6:48 GMT today GBP/NOK was up 0.07% for the day to trade at 10.5669. The pair touched a daily high at 10.5745 at 6:00 GMT.

Fundamental view

United Kingdom

At 11:00 GMT Bank of England is to announce its decision on monetary policy. The benchmark interest rate will probably be left unchanged at 0.50%, where it has been set at the meeting on policy on February 5th 2009. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank left intact or raised borrowing costs, this would have a bullish effect on the sterling.

At the same time, the monthly pace of bank’s monetary stimulus will probably be left intact as well, at 375 billion GBP. The central bank issues new money in order to purchase gilts from private investors such as pension funds and insurance companies. In case monetary stimulus is increased (in order to further spur economic growth), this will usually devalue nation’s currency.

Norway

Manufacturing output in Norway, an indicator measuring the change in the total inflation-adjusted value of production by manufacturers, probably widened 0.3% in June, according to the median estimate by experts, following a 0.3% drop in May. Annualized manufacturing output increased 2.4% in June. Manufacturing production accounts for almost 80% of total industrial production, as the latter is a dominant segment of country’s economy. In case output expanded more than projected, this would have a bullish effect on the krone. Statistics Norway will release the official figures at 8:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 10.5763. In case GBP/NOK manages to breach the first resistance level at 10.5977, it will probably continue up to test 10.6381. In case the second key resistance is broken, the pair will probably attempt to advance to 10.6593.

If GBP/NOK manages to breach the first key support at 10.5356, it will probably continue to slide and test 10.5145. With this second key support broken, the movement to the downside will probably continue to 10.4739.