EURSEK Up After Eurozone PMI Surprise, Swedish Downbeat Data
The EURSEK pair surged today and hit a 2-week peak after Sweden released softer-than-expected capacity utilization data, and the Eurozone posted very upbeat PMI data.
Capacity utilization in Sweden dropped by 2.1% in Q4 2019 after it had posted a 0.5% gain in the 3rd quarter. The downbeat nature of this news release also further compounded the SEK’s woes, which were brought on earlier in the week after pessimistic inflation figures hit the Krona.
On the contrary, the Eurozone posted upbeat PMI data this morning, with the German Flash Manufacturing PMI coming in at 47.8, which was better than the 44.8 that the markets were expecting, and also better than the previous figure of 45.3. French Flash Services PMI data was recorded at 52.6, which was better than the consensus figure of 51.4 and also higher than the last number, which was revised downwards to 51.0. German Flash Services PMI was only mildly off-target, registering at 53.3 versus the consensus number of 53.9 and the previous figure of 54.2.
The surge in the EURSEK has brought the pair close to the resistance at 10.6193, which is where previous highs of 8 July and 26 Nov 2019, as well as a cluster of prior lows of September 2019, are found. This resistance is also close to the lower border of a previously breached ascending channel.
A break of this resistance takes the EURSEK back into the channel, where it can have the opportunity to target the opposing channel border in a further upside push. However, this move would have to successfully defeat resistance levels at 10.68249 and 10.72504 in sequence to be actualized.
On the flip side, failure to break above 10.6193 could force a retreat towards 10.56643 (previous high of 10 Dec 2019 as well as a cluster of highs in January 2020), with 10.49164 waiting in the wings if downside pressure can overcome this support area.