USD/SEK Rockets On Disappointing Swedish Retail Sales

SEK was the biggest mover in Europe Thursday morning after retail sales in Sweden declined unexpectedly in July by 0.7% MoM, missing expectations for a 0.1% MoM rise. The reversal from June’s 0.6% MoM rise raised questions about the strength of the recovery. SEK declined against all major currencies.

USD/SEK had been rising ahead of the data and jumped further when the number came out. Starting around 6.5300 immediately before the announcement, it found resistance at the 6.5680 (R1) level and since then has been is moving modestly downwards.

Since the beginning of August, USD/SEK has moved sideways in a trading range between the 6.4656 (S3) and 6.5680 (R1) boundaries (4- and 1-hour charts). However, since both the RSI and Stochastic oscillators are ready to exit their overbought areas, I believe that the rate might move back to the 6.5348 (S1) level, staying within the range. A break below that support should target the next support at 6.4961 (S2).

Support: Support is found at the 6.5348 (S1) level, followed by 6.4961 (S2) and 6.4656 (S3) respectively.

Resistance: Resistance levels are at 6.5680 (R1), 6.5845 (R2) and 6.6149(R3) (4hour chart).



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