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USD/SEK falls to multi-month lows as soft CPI data and dovish bets on the Fed weight

  • The USD/SEK plunged towards 10.590, seeing 2.3% losses and hitting it lowest point since August.
  • Swedish and US CPI readings from October came in lower than expected.
  • Dovish bets on the Fed are pushing the pair downwards.

The USD/SEK dived vertically on Tuesday's session, falling to 10.590, tallying 2.3% daily losses. This was mainly driven by the USD weakening after the report of soft inflation figures for October, which was cheered by financial markets as their are now betting on the Federal Reserve (Fed) not hiking in December.

During October, the US Consumer Price Index (CPI) failed to meet expectations, exhibiting a decrease in the annual rate from 3.7% to 3.2%. This figure fell below the consensus forecast of 3.3%. Additionally, the Core CPI experienced a 0.2% increase in October, dropping the annual rate to 4%. These statistics further solidify the prevailing belief that the Federal Reserve is unlikely to proceed with further interest rate increases and cut rates sooner rather than later.

On Wednesday, the US will report Producer Price Index (PPI) and Retail Sales data from October, which could further reinforce the dovish narrative.

On the Swedish side, its CPI declined to 6.5% YoY but failed to trigger a reaction on the pair during the European session.

USD/SEK levels to watch

Based on the daily chart, the USD/SEK displays a bearish technical bias, with indicators reflecting that the sellers covered significant ground. The Relative Strength Index (RSI) reached oversold conditions, which could suggest that an upward correction could be possible in the next sessions, while the Moving Average Convergence (MACD) histogram prints rising red bars.  In the larger context, the pair is now below the 20,100 and 200-day Simple Moving Averages (SMAs), confirming that the outlook has turned negative for the pair.

Supports: 10.650, 10.600, 10.550. 
Resistances: 10.673 (200-day SMA), 10.692, 10.715.


USD/SEK daily chart

USD/SEK

Overview
Today last price10.6026
Today Daily Change-0.2410
Today Daily Change %-2.22
Today daily open10.8436
 
Trends
Daily SMA2011.0282
Daily SMA5011.0431
Daily SMA10010.8719
Daily SMA20010.6875
 
Levels
Previous Daily High10.9163
Previous Daily Low10.8291
Previous Weekly High10.9808
Previous Weekly Low10.8282
Previous Monthly High11.2275
Previous Monthly Low10.8482
Daily Fibonacci 38.2%10.8624
Daily Fibonacci 61.8%10.883
Daily Pivot Point S110.8097
Daily Pivot Point S210.7758
Daily Pivot Point S310.7225
Daily Pivot Point R110.8969
Daily Pivot Point R210.9501
Daily Pivot Point R310.984

Author

Patricio Martín

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

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