The USDSEK extended losses as the Krona benefitted from an increase in home prices for the 5th month in a row. September’s Sweden HOX/Valueguard home price index revealed a 1.1% growth in home prices on a sequential basis, & a year-on-year growth of 8.9%.
This is the fifth successive month of growth for home prices following April’s bottom, at the height of the country’s coronavirus epidemic. Details show that house prices climbed 11.4% and prices for apartments rose 5%. Transaction volumes also hit an all-time high in September, indicating that house prices were in a strong rebound.
There is widespread expectation that house prices will maintain a positive trajectory, with more rapid increases expected in the months ahead as the low-interest-rate environment has encouraged homeownership. Nordea expressed a view in an investment report that it was possible for its initial forecast for a 6% increase in home prices for 2020 to be surpassed.
The rise in home prices has helped homeowners stave off any job loss effects, which is critical to the recovery of the Swedish economy. As a result, the Swedish Krona has benefitted from the upbeat data. It is now the better for it in its pairing with the greenback.
Technical Outlook for USDSEK
The downward leg from the upside correction of 12-16 October has resumed, with the USDSEK trading 0.16% lower on the day. Tuesday’s downward move broke below the 8.78111 support, putting the price on the pathway to the 8.59761 support. A breach of this support targets 8.51198.
A bullish recovery that takes the pair above 8.78111 allows 8.85672 to come into view. Continuation of the recovery targets 8.98560.
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USDSEK Daily Chart
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