The dollar traded mixed against its G10 counterparts during the European morning Monday, in the absence of any major market moving events. It was higher against GBP and NZD, in that order, while it was lower against SEK and EUR. The greenback was virtually unchanged vs CAD, JPY, AUD NOK and CHF.
• The Swedish krona gained after the country’s official and PES unemployment rate, both for May, declined. Even though the market reaction was limited at the release of the PES unemployment rate, the currency gathered strength following the release of the official rate. In the event, the unemployment rate declined to 8.0% from 8.3% previously, a touch above the forecast of 7.9%.
On top of the unexpected surge in the CPI last week, the strong data suggest that the economy is back on track. This also eases pressure on Riksbank to cut rates deeper into negative territory at their July meeting. The positive sentiment is likely to keep SEK supported, but we prefer to wait for more upside surprises in data to get convinced that Sweden’s economy is back on a recovery path.
• USD/SEK traded lower during the European morning Monday after hitting resistance at 8.2340 (R1). The rate is now headed towards the support line of 8.1500 (S1), and since the short-term bias is to the downside, I would expect a clear move below that line to challenge our next support at 8.0800 (S2). However, taking a look at our short-term oscillators, I see positive divergence between the RSI and price action, while the MACD, although negative, has crossed above its trigger line. Having these momentum signs in mind, I would be careful of a possible corrective bounce before the bears take control again. On the daily chart, I see that USD/SEK is trading below the downtrend line taken from back at the low of the 15th of August 2014, which keeps the medium-term outlook negative as well. Further declines are also supported by our daily momentum studies. The 14-day RSI hit resistance at its 50 line and moved lower, while the MACD, continued south after falling below both its zero and signal lines.
• Support: 8.1500 (S1), 8.0800 (S2), 8.0000 (S3)
• Resistance: 8.2340 (R1) 8.2750 (R2), 8.3200 (R3)
Preparado por: Marshall Gittler, Charalambos Pissouros y Sakis Paraskevov