25 July 2019, GKFX – The Swedish Krona is giving away part of its recent gains and is lifting EURSEK to the vicinity of the 10.60 area, coincident with the 200-hour SMA.
EURSEK offered on data, looks to ECB
SEK loses some momentum following mixed results from today’s docket in the Scandinavian economy and ahead of the critical ECB gathering.
In fact, earlier in the day, the NIESR Survey showed Sweden Consumer Confidence improved to 97.7 for the current month, Manufacturing Confidence ticked lower to 96.9 (from 100.2) and Economic Sentiment extended the down move prevailing since September 2018, dropping to 96.8, the lowest level since mid-2013.
Additional releases in the Nordic economy saw Producer Prices contracting 0.2% inter-month during June and rising 2.5% from a year earlier. Furthermore, Household Lending Growth expanded 4.9% on a year to June and the unemployment rate unexpectedly increased to 7.6% also during last month.
What to look around for SEK
The Krona has reclaimed some ground lost during July, although gains remain capped around the 10.50/48 area vs. the shared currency for the time being. Today’s ECB event should be key for the Riksbank, as the Scandinavian central banks usually track the moves in its European peer. If the ECB delivers what markets are expecting, the Riksbank’s plans to hike rates by year-end or early 2020 could face extra headwinds in case economic fundamentals and inflation figures do not perform better.
EURSEK technical analysis
As of writing the cross is up 0.16% at 10.5122 and a break above 10.5291 (200-hour SMA) would aim for 10.5738 (100-day SMA) and then 10.6389 (monthly high Jul.9). On the downside, the next support lines up at 10.4869 (monthly low Jul.3) seconded by 10.4580 (200-day SMA) and finally 10.4018 (61.8% Fibo of 2019 up move).
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