The SEK recently strengthened against the USD following the Riksbank’s decision to cut rates to 3.75%. On the other hand, Federal Reserve officials are showing caution about cutting rates. The USD also traded weak after disappointing Jobless Claims figures were released, indicating downward pressure on the currency.
Despite the bearish momentum for the USD/SEK pair, inflation and the strong performance of the US economy have been supporting the Dollar’s recovery. This has led to increased hawkish bets on the Federal Reserve. However, the SEK faced weakness after the Riksbank’s rate cut decision, with indications that more cuts may be on the way.
The US Dollar encountered downward pressure following the release of disappointing Initial Jobless Claims data. This has raised concerns about weakening labor market conditions. Despite this, market expectations regarding the Fed’s easing cycle starting in September have not changed. Next week’s US inflation data is anticipated to influence market expectations on the Fed.
Technical analysis of the USD/SEK pair shows a recent move in the positive territory for the Relative Strength Index (RSI), but with a downward trend. The MACD histogram also indicates rising red bars, suggesting a bearish momentum. While bullish players currently dominate the market price-wise, the overall trend may be losing steam, hinting at a potential shift in market momentum.
Recent movements have shown buyers struggling to maintain the 20-day Simple Moving Average (SMA) at 10.88, indicating a weak short-term trend. However, the long-term outlook appears strong as the pair remains above the 100 and 200-day SMA. This suggests that despite current challenges, the USD/SEK pair may still have room for potential growth in the future.
