USD/SEK sees an uptick as US dollar strengthens, investors await CPI, Fed decision

The USD/SEK currency pair advanced near 10.50, showing modest gains.
Strong labor market indicators challenge the Federal Reserve's dovish stance, spurring speculations on potential policy shifts.
US bond yields are rising, benefiting the US Dollar.

Patricio Martín FXStreet

The US Dollar (USD) made noticeable gains in Monday's trading session against the Swedish Krona (SEK), propped up by a strengthening dollar ahead of November’s Consumer Price Index (CPI) and the Federal Reserve's decision on Tuesday and Wednesday, respectively.

The US Bureau of Labor Statistics data showed a better-than-anticipated rise in November's Average Hourly Earnings, recording a 0.4% (MoM) increase, contrasted to the forecasted 0.3% and the prior 0.2% increase. Furthermore, November saw a remarkable surge in the US Nonfarm Payrolls, reaching 199K from a previous 150K, higher than the projected 180K, with the Unemployment rate decreasing to 3.7% from 3.9%.

The US Treasury yields are trending upwards, with the 2-year rate currently trading at.4.73%. Both the 5-year and 10-year yields are hovering around 4.25%. Higher US yields may be attributed to markets questioning the recent dovish speculations on the Federal Reserve (Fed), as strong labor market figures may push the bank to be more aggressive and hold rates in restrictive levels for longer than expected.

That said, on Tuesday, the US will deliver the Headline and Core Consumer Price Index (CPI) from November from the U.S. Bureau of Labor Statistics. The following day, attention will be onthe Fed Interest Rate Decision and the Federal Open Market Committee (FOMC) Economic and Interest rate projections, followed by Chair Powell's presser where investors will look for clues for forward guidance. As for now, the CME FedWatch tool indicates that markets are delaying rate cuts in 2024 after Friday’s labor market data.

USD/SEK levels to watch

On the daily chart, the positive slope of the Relative Strength Index (RSI), though in negative territory, signals a potential build-up of buying momentum. This subtle strength of the bulls is further corroborated by the Moving Average Convergence Divergence (MACD), depicting rising green bars, suggesting that buyer momentum is starting to take precedence.

The pair's position concerning Simple Moving Averages (SMAs) also suggests that the bulls are waking up. Despite being lodged below the longer-term 100 and 200-day SMAs, indicative of a dominantly bearish backdrop, the pair maintains a stance above the 20-day SMA, which mirrors a short-term bullish pulse amidst a broader bearish scenario.

Support Levels: 10.470, 10.453 (20-day SMA), 10.430.
Resistance Levels: 10.540, 10.570, 10.600.

USD/SEK daily chart

USD/SEK

Overview
Today last price	10.4905
Today Daily Change	0.0216
Today Daily Change %	0.21
Today daily open	10.4689

Trends
Daily SMA20	10.4844
Daily SMA50	10.8061
Daily SMA100	10.8484
Daily SMA200	10.6896

Levels
Previous Daily High	10.5195
Previous Daily Low	10.3709
Previous Weekly High	10.5195
Previous Weekly Low	10.365
Previous Monthly High	11.2449
Previous Monthly Low	10.1997
Daily Fibonacci 38.2%	10.4628
Daily Fibonacci 61.8%	10.4277
Daily Pivot Point S1	10.3867
Daily Pivot Point S2	10.3046
Daily Pivot Point S3	10.2382
Daily Pivot Point R1	10.5353
Daily Pivot Point R2	10.6017
Daily Pivot Point R3	10.6839

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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