USD/SEK to Rise on Weak Nordic Growth and European Turmoil
USD/SEK TRADING STRATEGY: PENDING LONG AT 9.0086
- Waiting for daily close above 9.0068 to enter long
- USD/SEK trading higher, reaching toward 8.9598
- SEK likely to fall from slow domestic, EU growth
See our free guide to learn how to use economic news in your trading strategy! USD/SEK looks like it is reaching toward a support range that if breached could see potentially higher gains fueled by potential headwinds in 2019. Breakthrough of the lower layer of the 8.959-9.0086 range may be accelerated by Sweden’s CPI data that may fall short of forecasts. The data is scheduled to be released on Monday.
USD/SEK – Daily Chart
Since February, USD/SEK traded along a support line that was ultimately broken mid-September and has not been able to recover from since, despite fruitless efforts in October and November. Re-testing the steep support will not likely happen anytime soon considering the pair would have to increase over six percent just to touch the bottom layer.
USD/SEK – Daily Chart
The pair more recently have been using the upper layer of the 8.8469-8.7527 range as support after it tested the lower level in mid-September. Fundamental factors of slower growth in Sweden and the EU along with broader regional political peril will likely push the Krona down, opening the possibility of re-testing the 8.959-9.0086 support range.
If USD/SEK has a daily close above 9.0086, an opportunity to go long might present itself, with the next resistance possibly at 9.1043. The difference in monetary policy will also push the pair higher. The Fed is on a data dependent path and will raise rates twice this year unless major economic indicators signal a slowdown. Conversely, the Riksbank has taken a gradualist approach to policy and intends on raising rates only once in the latter half of the year.
Check out my Swedish Krona and Norwegian Krone forecast to develop your Nordic trading strategy!
USD/SEK TRADING RESOURCES
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-- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or@ZabelinDimitri on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.