USD/SEK rises after Riksbank's cut and dovish outlook


  • USD/SEK maintains gains exceeding 0.40%, underscoring the Dollar's continued firmness during Wednesday's session.
  • The Riksbank sports a dovish view, trimming rates as forecasted, coupled with indications of more rate cuts in the second half of this year.
  • Fed hawks are stepping in and challenging the dovish narrative.

The USD/SEK pair is trading higher at 10.55, marking a significant gain from a low of 10.45 last week. This uptick comes on the back of the monetary policy divergences between the Federal Reserve (Fed) and Riksbank. On the one hand, the Fed’s officials are turning hawkish. On the other hand, Riksbank, with a more dovish stance, has started to cut rate cuts and may undertake additional reductions in the second half of the year if the present economic conditions prevail.

After cutting rates to 3.75%, Governor Thedeen expressed a sense of caution, suggesting that a rate cut in June is improbable given the existing circumstances. He emphasized the concern regarding the weakening of the Swedish Krona (SEK), indicating that it needs to be taken into account. As for now, market expectations anticipate a total of 75 basis points of rate cuts over the next 12 months.

On the US side, recent dovish bets have been given up by investors, and the start of the easing cycle of the Fed is being priced in to start in November.

USD/SEK technical analysis

On the daily chart, the Relative Strength Index (RSI) for the USD/SEK pair resides within the positive territory after recovering from a dip into the negative domain. The MACD histogram sheds more light on the scenario, with progressively decreasing red bars showcasing a slowdown in negative momentum.

USD/SEK daily chart

In regard to the Simple Moving Averages (SMAs), the USD/SEK pair has reclaimed territory above the pivotal 20-day SMA. This escape from the bears not only illustrates evidence of buyers stepping in to restore short-term sentiment but also signals a potential shift in momentum. When observing the larger picture, the pair maintains a position above the 100 and 200-day SMAs, illustrating a solid long-term trend in favor of the bulls.

USD/SEK

Overview
Today last price 10.9054
Today Daily Change 0.0568
Today Daily Change % 0.52
Today daily open 10.8486
 
Trends
Daily SMA20 10.8735
Daily SMA50 10.6278
Daily SMA100 10.4794
Daily SMA200 10.6575
 
Levels
Previous Daily High 10.8785
Previous Daily Low 10.7876
Previous Weekly High 11.1318
Previous Weekly Low 10.7346
Previous Monthly High 11.0627
Previous Monthly Low 10.4914
Daily Fibonacci 38.2% 10.8438
Daily Fibonacci 61.8% 10.8223
Daily Pivot Point S1 10.7979
Daily Pivot Point S2 10.7473
Daily Pivot Point S3 10.707
Daily Pivot Point R1 10.8889
Daily Pivot Point R2 10.9292
Daily Pivot Point R3 10.9798

 

 

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