The USD/SEK pair continues its upward trend, reaching 11.3101 yesterday, the highest level since October 21, 2022. The USD/SEK pair has risen by approximately 13% since the low of September 30, 2024, when it recorded 10.0227, to the peak it reached yesterday at 11.3101.
Recent Swedish economic data shows that the Swedish economy is experiencing weakness, as follows:
- Retail sales on a monthly basis in November declined by 0.2%, which is lower than the previous reading (0.9%).
- The Consumer Price Index (CPI) on a yearly basis in December grew by 0.8%, which is below expectations (1.0%) and the previous reading (1.6%), and lower than the target set by the Swedish central bank of 2%.
- The Purchasing Managers’ Index (PMI) for the manufacturing sector in December registered 52.4 points, which is lower than the previous reading (53.8).
- The Consumer Confidence Index in December declined to 96.7 points, which is lower than the previous reading (101.6).
An important factor contributing to the upward momentum of the USD/SEK pair is the strength and resilience of the U.S. economy, as most U.S. economic data has exceeded expectations. Additionally, the rise in U.S. Treasury bond yields across various maturities has put pressure on most foreign currencies against the U.S. dollar.
The Swedish central bank lowered interest rates by 150 basis points last year, from 4.00% to 2.50%, and expectations indicate further rate cuts this year.
Regarding the technical side, if the pivot point of 11.2569 for the USD/SEK pair is broken, there is a possibility of targeting support levels at 11.1880, 11.1316, and 11.0627. If the pivot point is surpassed, resistance levels at 11.3133, 11.3822, and 11.4386 could be targeted.
The Relative Strength Index (RSI), currently at 65, indicates positive momentum for the USD/ SEK pair.
The Positive Directional Indicator (DMI+) is recording about 25 points, compared to the Negative Directional Indicator (DMI-) at approximately 11 points. The significant gap between these two indicators suggests strong buying pressure on the USD/SEK pair.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
