USD/SEK eases from multi-month highs after Riksbank’s hike, US Dollar eases

USD/SEK increased to 11.247, seeing a 1% gains and then retreated to 11.152.
The Riksbank hiked to 4%, leaving the door open for further hikes.
US yields continue to rise, benefiting the USD.

Patricio Martín FXStreet

On Thursday’s session, the USD/SEK climbed to its highest level since October 2022, towards 11.247, seeing 1% daily gains, but failed to hold its momentum and settled at 11.152. On the SEK's side, the Swedish Riksbank hiked rates by 25 bps and sounded hawkish, while on the USD side, the Greenback eased during the American session, and seems to be consolidating gains.

Investors assess Riksbank and Fed decisions

The Swedish Riksbank announced on Thursday that it would hike rates from 3.75% to 4% as widely anticipated. In the policy statement, the bank commented that progress was being made, but inflation remained too high, noting that further hikes may be necessary. In the meantime, markets are discounting that the Riksbank will deliver one final hike in November to end the tightening cycle, mainly due to concerns over the health of the Swedish economy, amongst the worst performers in Europe.

On the US side, the Federal Reserve (Fed) held rates steady on Wednesday. Still, their Summary of Economic Projections (SEP) revealed that the median rate forecast of the Federal Open Market Committee (FOMC) members stood at 5.6% for 2023, meaning that one more hike in on the table. In addition, the rate projections 2024 were revised to 5.1% and virtually delayed rate cuts. These hawkish projections boosted the US yields, which trade in multi-year highs as investors are bracing for one more hike by the Fed and rates being higher for longer. The 10-year bond yield reached 4.47% while the two and 5-year yield rose to 5.14% and 4.61%, respectively. That being said, the DXY index found support at a high near 105.70 and eased to 105.30 but the expectations of a more aggressive Fed will likely limit its losses.

USD/SEK Levels to watch

The USD/SEK daily chart signals a bullish sentiment for the short term. The Relative Strength Index (RSI) is favourably positioned in positive territory above its midline, reflecting an upward movement. Similarly, Moving Average Convergence Divergence (MACD) depicts green bars, affirming the bullish momentum. In addition, the pair is above the 20,100,200-day Simple Moving Average (SMA), implying that the bulls retain control on a broader scale.

Support levels: 11.150, 11.070 (20-day SMA), 11.000.
Resistance levels: 11.289, 11.300, 11.406.

USD/SEK Daily Chart

USD/SEK

Overview
Today last price	11.1504
Today Daily Change	0.0077
Today Daily Change %	0.07
Today daily open	11.1427

Trends
Daily SMA20	11.0788
Daily SMA50	10.7827
Daily SMA100	10.7289
Daily SMA200	10.5746

Levels
Previous Daily High	11.1784
Previous Daily Low	11.0275
Previous Weekly High	11.2085
Previous Weekly Low	11.0496
Previous Monthly High	11.0993
Previous Monthly Low	10.4126
Daily Fibonacci 38.2%	11.0851
Daily Fibonacci 61.8%	11.1208
Daily Pivot Point S1	11.054
Daily Pivot Point S2	10.9653
Daily Pivot Point S3	10.9031
Daily Pivot Point R1	11.2049
Daily Pivot Point R2	11.2671
Daily Pivot Point R3	11.3558

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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