USD/SEK slid during the European morning Friday

USD/SEK

• The dollar traded mixed against its G10 peers during the European morning Friday, in the absence of any major market moving events. It was higher against NOK, CHF, NZD, CAD and GBP in that order, while it was lower vs SEK and JPY. The greenback was stable against AUD and EUR.

• Swedish krona gained after the country's GDP for Q2 showed that the economy expanded faster than initially estimated. On top of that, the official unemployment rate declined to 6.4% in August from 6.5% in July, contrary to expectations of a rise to 6.8%. USD/SEK slid around 0.50% on the news, only to recover some of the losses in the following hour. The improved data support Sweden's central bank decision last week to remain on hold and keep the bond purchases program intact. Although SEK may continue strengthening in the near term, given that the Bank remains willing to act, I would treat any short-term strength as a correction of the krona's longer-term downtrend.

• USD/SEK slid during the European morning Friday, following the strong data from Sweden. The rate fell below the support (now turned into resistance) of 8.3450 (R1) and is now headed towards the 8.2700 (S1) support hurdle. The short-term bias is to the downside in my view and therefore I would expect a decisive dip below 8.2700 (S1) to open the way for the next support at 8.2350 (S2). Our momentum studies detect negative momentum and support the notion. The RSI fell below its 50 line, while the MACD, already negative, has just turned below its trigger line. On the daily chart, the pair is still trading above the major uptrend line taken from the low of the 19th of March 2014. As a result, for now I would treat the short-term downtrend as a corrective phase of that long-term upside path.

• Support: 8.2700 (S1), 8.2350 (S2), 8.2000 (S3)

• Resistance: 8.3450 (R1), 8.3850 (R2), 8.4560 (R3)