- EUR/SEK drops and tests 4-week lows around 10.6200.
- The cross is losing ground for the third week in a row.
- GDP figures surprised to the upside in Q1.
The Swedish Krona is now trimming part of its earlier gains vs. the euro and is taking EUR/SEK above the 10.6300 region.
EUR/SEK looks to risk trends
SEK is looking to extend the weekly upside, although it seems to have met a strong resistance just below the 10.6300 mark so far today.
The Krona has accelerated its upside momentum after GDP figures published on Wednesday showed the economy has expanded more than initially expected during the January-March period.
The optimism around the figures, however, has subsided somewhat after the NIER survey showed consumer confidence remains weak and unable to gather traction for the time being.
What to look for around SEK
The Krona has been appreciating for the last three weeks after recording yearly lows near 10.8500 the figure earlier in May. However, the pass through of the strong depreciation of the currency to consumer prices remains slow to say the least and in spite of April’s higher-than-expected inflation figures. That said, the case for another rate hike by the Scandinavian central bank still remains on the table for the time being and could come at some point by end-2019 or early 2020. This idea, however, is in direct conflict with the ‘neutral for longer’ stance now expected from the ECB, as it is well known that the Riksbank is likely to move in tandem with its European peer.
EUR/SEK levels to consider
As of writing the cross is losing 0.03% at 10.6318 and faces the next support at 10.5715 (55-day SMA) followed by 10.5102 (100-day SMA) and finally 10.4873 (50% Fibo of the December-May rally). On the flip side, a break above 10.7342 (21-day SMA) would aim for 10.8008 (high May 21) and then 10.8498 (2019 high May 13).
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