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.

Patricio Martín FXStreet

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

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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