Sentiment and NATO membership may strengthen the SEK
The force was definitely with traders with long positions on May 4 when Fed's Powell held the central bank's statement. The yields on government bonds fell, and S&P 500 rose 2.9 per cent. One reason behind the market move was that Powell communicated that a 75 basis points increase was not actively considered for the upcoming months.
The force was definitely with traders with long positions on May 4 when Fed's Powell held the central bank's statement. The yields on government bonds fell, and S&P 500 rose 2.9 per cent. One reason behind the market move was that Powell communicated that a 75 basis points increase was not actively considered for the upcoming months.
Meanwhile, the Swedish central bank, Sveriges Riksbank, has shifted to become more hawkish. That after the central bank surprisingly increased rates last Thursday. Stefan Ingves, the governor of Sveriges Riksbank, is also using a more strict language along with QT.
Nevertheless, USD/SEK has risen and is currently trading close to the ceiling of a rising trend. Given that the hawkish sentiment in the US may have peaked, while the hawkish view in Sweden may just have started, the odds may favour downside in the USD/SEK. A potential NATO membership may also trigger a stronger SEK.
USD/SEK, June 2, 2021 to May 5, 2022
USD/SEK, five-year price chart
The full name for abbreviations used in the previous text:
EMA 9: 9-day exponential moving average
Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.
MA20: 20-day moving average
MA50: 50-day moving average
MA100: 100-day moving average
MA200: 200-day moving average
MACD: Moving average convergence divergence