USD/SEK reversed its multi-month-high rally ahead of eventful week

USD/SEK soared to 11.249, its highest since early November 2022.
Riskbank is expected to hike 25 bps to 4%.
The Fed will likely deliver a hawkish pause.

Patricio Martín FXStreet

The USD/SEK saw volatility on Monday, rising to a high since November 4, 2022, then settling at 11.122, securing daily losses. The USD trading somewhat soft, and the Krona holding its ground ahead of one last hike by the Riksbank on Thursday contributed to the pair movements.

In line with that, markets are confident that the Riksbank will deliver its last hike of 25 bps of its tightening cycle to 4%. The Swedish bank will also release updated macro forecasts, and Governor Thedeen will be on the wires on Friday. For the rest of the year, investors are discounting that there won’t be any more hikes and that the policy rate will peak at 4.05% in Q2 2024.

On the Fed’s side, markets practically priced in a pause on Wednesday but a hawkish one. The bank will likely try to convince markets that the policy will still depend on incoming data and will leave the door open for further hikes. In the meantime, according to the CME FedWatch tool, investors are placing 35% odds on one last hike of 25 bps in November or December, but those odds will rise and fall according to the outcome of the incoming data.

In addition, the Fed will release an updated macro forecast and revised dot plot, which will likely set the pace of the USD price dynamics and the expectations for the upcoming meetings.

USD/SEK Levels to watch

The daily chart highlights a neutral technical outlook for USD/SEK as signs of bullish exhaustion become evident, but still, the pair remains in multi-month highs. The Relative Strength Index (RSI) indicates a decrease in upward momentum with a negative slope above its midline, while the Moving Average Convergence (MACD) lays out neutral green bars. Furthermore, the pair is above the 20,100,200-day Simple Moving Average (SMA), indicating buyers command the broader perspective.

Support levels: 11.0960, 11.0650, 11.0550.
Resistance levels: 11.175, 11.205, 11.249.

USD/SEK Daily Chart

USD/SEK

Overview
Today last price	11.151
Today Daily Change	-0.0493
Today Daily Change %	-0.44
Today daily open	11.2003

Trends
Daily SMA20	11.0461
Daily SMA50	10.7498
Daily SMA100	10.7033
Daily SMA200	10.5608

Levels
Previous Daily High	11.206
Previous Daily Low	11.1254
Previous Weekly High	11.2085
Previous Weekly Low	11.0496
Previous Monthly High	11.0993
Previous Monthly Low	10.4126
Daily Fibonacci 38.2%	11.1752
Daily Fibonacci 61.8%	11.1562
Daily Pivot Point S1	11.1485
Daily Pivot Point S2	11.0967
Daily Pivot Point S3	11.0679
Daily Pivot Point R1	11.2291
Daily Pivot Point R2	11.2578
Daily Pivot Point R3	11.3096

Author

Patricio Martín

FXStreet

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

EUR/USD eases marginally, back to 1.1800

EUR/USD navigates a narrow range on Thursday, hovering around the 1.1800 neighbourhood in a context of humble gains in the US Dollar. The pair’s lacklustre performance come amid the unabated trade uncertainty, geopolitical tensions in the Middle East and the cautious tone from the ECB’s Lagarde.

GBP/USD retreats from tops, approaching 1.3540

GBP/USD partially sets aside Wednesday’s strong advance and recedes to the 1.3540 region on Thursday. Cable’s modest retracement follows the equally acceptable gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold clings to gains just below $5,200, focus on geopolitics

Gold is edging modestly higher on Thursday, adding to Wednesday’s uptick and holding just below the $5,200 mark per troy ounce against the backdrop of modest gains in the US Dollar. In the meantime, attention is turning to the geopolitical scenario following US-Iran nuclear talks.