USD/SEK declines as markets digest US Retail Sales and CPI figures


  • US CPI and Retail Sales came in lower than expected.
  • The odds of a cut from the Fed in July slightly increase, and September continues being the best-case scenario.
  • Fed officials might change their tone as economic figures showed softness.

On Wednesday, the USD/SEK saw sharp losses as the potential for sooner interest rate cuts by the Fed, in light of the recent Consumer Price Index (CPI) disinflation and lackluster Retail Sales, may exert weight on the USD.

On the data front, the US Bureau of Labor Statistics reported that the US witnessed a marginal decrease in inflation, with the headline CPI moving down from 3.5% in March to 3.4% in April. Core CPI also observed a fall, retreating from 3.8% to 3.6%, aligning with market expectations. In addition, U.S. Retail sales in April remained stagnant, a dip from the anticipated 0.4% growth.

The cooling economic indicators imply that the Federal Reserve might contemplate a sooner start of the easing cycle which would invariably exert pressure on the USD. The CME FedWatch Tool highlights that investors have already priced in that there will be no changes in interest rates in June, but continue seeing with good eyes a cut in September. Those odds slightly increase for the July meeting but remain low.

USD/SEK technical analysis

On the daily chart, the Relative Strength Index (RSI) for the USD/SEK pair resides in negative territory. The latest reading, marking a downward trend, suggests that sellers are dominating. Moreover, the Moving Average Convergence Divergence (MACD) is producing rising red bars, thus demonstrating negative momentum.

That being said, strong support was noted at the 200-day Simple Moving Average (SMA) with buyers defending the level at 10.66. This defense acts as a crucial bulwark against any potential downward trend reversals.

 

EUR/JPY

Overview
Today last price 168.37
Today Daily Change -0.87
Today Daily Change % -0.51
Today daily open 169.24
 
Trends
Daily SMA20 166.55
Daily SMA50 164.62
Daily SMA100 162.45
Daily SMA200 160.61
 
Levels
Previous Daily High 169.36
Previous Daily Low 168.47
Previous Weekly High 167.97
Previous Weekly Low 164.48
Previous Monthly High 171.6
Previous Monthly Low 162.28
Daily Fibonacci 38.2% 169.02
Daily Fibonacci 61.8% 168.81
Daily Pivot Point S1 168.69
Daily Pivot Point S2 168.14
Daily Pivot Point S3 167.8
Daily Pivot Point R1 169.58
Daily Pivot Point R2 169.91
Daily Pivot Point R3 170.46

 

 

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