USD/SEK Trades Higher As Riskbank Maintains Dovish Stance
The USD/SEK has scored a 5th consecutive day of gains after the Riksbank maintained its dovish stance today. The Swedish Krona weakened against the greenback after Sweden’s central bank said it would leave its interest rates unchanged until the third quarter of 2024. The interest rate currently stands at 0.00%.
The Riksbank is also pledging to make a downward adjustment on the repo rate if the relevant data show weakened inflationary prospects.
This dovish scenario leaves the USD/SEK with room for an advance, mainly if tomorrow’s jobs report produces a strong number. A stellar Non-Farm Payrolls report brings the Fed’s tapering timetable closer. The Fed already has an earlier forecast horizon for lift-off, set at 2023.
Technical Outlook for USD/SEK
The pair is now aiming to test the resistance at 8.59761. A break of this level opens the pathway towards 8.64247, with the 2021 high at 8.7646 and the 8.79182 resistance levels serving as additional upside targets.
A rejection at 8.59761 serves up a scenario of progressively lower highs. This situation could lead to a dip towards 8.51198, with additional price targets located at 8.46926 and 8.42214 (18 January and 27 April highs).