USD/SEK soars above the 20-day SMA amid negative market sentiment, Fed Beige Book

USD/SEK records more than 1% gains rising above the 20-day SMA around 11.025.
The USD is getting traction amid risk-off flows.
The Fed Beige Book report didn’t report any relevant insights on the US economic activity.
Despite rising inflation, markets discount low odds of further hikes by Riksbank.

Patricio Martín FXStreet

On Wednesday, the USD/SEK rose above the 20-day Simple Moving Average (SMA) for the first time since September 25, driven by a broad-based US Dollar strength. Rising hawkish bets on the Federal Reserve (Fed) and negative market sentiment are the main drivers of the green currency’s strength.

Recent economic activity figures revealed that the US economy is holding strong despite the Federal Reserve's (Fed) contractionary monetary policy, and as the bank stated that is stance is data-dependant, the odds of a 25 hike in the December meeting rose to nearly 40% after strong Retail Sales and Industrial Production figures revealed on Tuesday. Those hawkish bets could also explain the increase in US Treasury bond yields, which increased to multi-week highs and also contributed to the upward movements of the USD.

On Wednesday, the Fed’s Beige book report on the US economic activity revealed no significant changes in the outlook since the September report and described the economy as “stable”.

On the SEK’s side, the Swedish Consumer Price Index (CPI) rose to 6.5% YoY, higher than the expected 6.3% but lower than the previous 7.5% reading. As for now, markets are expecting that the Riksbank won’t hike again in 2023 after September’s increase and analysts from Commerzbank Research stated that there is no upside for the SEK for the rest of the year as the Swedish bank is not acting decisively enough to combat inflation.

USD/SEK Levels to watch

Analysing the daily chart, USD/SEK exhibits signs of bulls recovering momentum. The Relative Strength Index (RSI) jumped above 50, while the Moving Average Convergence (MACD) presents decreasing red bars. Plus, the pair is now above the 20,100 and 200-day Simple Moving Averages (SMA), indicating that on the broader scale, the bulls are in command.

Support levels: 10.993 (20-day SMA),10.900,10.808 (100-day SMA).
Resistance levels: 11.055,11.105, 11.158.

USD/SEK Daily Chart

USD/SEK

Overview
Today last price	11.0264
Today Daily Change	0.1116
Today Daily Change %	1.02
Today daily open	10.9148

Trends
Daily SMA20	11.0009
Daily SMA50	10.9949
Daily SMA100	10.8238
Daily SMA200	10.6244

Levels
Previous Daily High	10.979
Previous Daily Low	10.8869
Previous Weekly High	11.0604
Previous Weekly Low	10.8482
Previous Monthly High	11.401
Previous Monthly Low	10.7524
Daily Fibonacci 38.2%	10.9221
Daily Fibonacci 61.8%	10.9438
Daily Pivot Point S1	10.8748
Daily Pivot Point S2	10.8348
Daily Pivot Point S3	10.7827
Daily Pivot Point R1	10.9669
Daily Pivot Point R2	11.019
Daily Pivot Point R3	11.059

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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