The USDSEK finds itself unable to sustain the price move below the 9 SEK level as key economic data from Sweden surprised to the upside. Data released on Tuesday showed that the Swedish Economic Sentiment Indicator extended its recovery in September, rising to 94.5 to establish hopes of recovery from the coronavirus in this Scandinavian nation.
The consumer sentiment index also rose, climbing to 88.3 as Swedish consumers had positive expectations on their own finances despite worries about the recovery of the economy.
These data follow a rise in the total business sector sentiment, as manufacturing sentiment and sectoral confidence all rise. The export orders index also staged a remarkable rebound, as did employment plans.
These data all point to a stronger-than-expected recovery in the Swedish economy. Consequently, Swedish Krona has been a beneficiary of the positive data at the expense of the US Dollar. The USDSEK currently trades 0.66% lower at 8.97900, following on from yesterday’s 0.88% gain of the Swedish Crown over the greenback.
Technical Outlook for USDSEK
The USDSEK has resumed the downtrend following two days of strong data from Sweden, coupled with the weakness on the greenback.
The pair has found resistance at 9.13309 and has resumed the downside move which targets the 8.85672 support. Price may find the current support at 8.98560 as a temporary pitstop. However, if the price continues on the path of decline and then 8.78111 becomes the next target to the south, with 8.59761 lining up as another potential downside target.
Conversely, if the price bounces on the 8.85672 support, a retest of 8.98560 may be in the offing. This move would have to follow a market response that favours USD bullishness, and such a move would probably lead to a test of 9.13309. Key events to watch for the remainder of the week are the US Presidential Debates and Friday’s Non-farm Payrolls report. Further information about the outlook for the USD can be found in the Q4 Outlook Report.