The rates continue within the upward trend which was formed in January 2018. This led to unpleasant consequences for the SEK, which reached the highest level for the last 17 years, although it was very difficult to resist a stronger USD amid the economic downturn in the EU and the stagnation of the Swedish economy.
There is an economic downturn in the EU continues, which means the SEK remains under pressure. However, the USD is getting weaker than before. The monetary policy of the FED is becoming softer, and Donald Trump requires the regulator to reduce the interest rate. In addition, the demand for risky assets is decreasing, which puts pressure on the USD. The current week for the USD is not saturated with macroeconomic reports that periodically support the USD, which makes it possible for the SEK to strengthen against the USD. Perhaps the basic retail sales index will support the USD today, but the latest data on the US economy has had a very small impact on the value of USD because today for investors the outcome of the trade conflict between the US and China is more important.
During the period of weakening of the dollar, the Euro receives support because the quarterly GDP reports of the EU countries meet the expectations of investors. Nevertheless, the economic sentiment index in the EU fell to a negative value of -1.6. Therefore, it is too early to talk about the recovery of the EU economy. Meanwhile, inflation in Sweden accelerated and reached the highest level in 6 months, at 2.1%.
Undoubtedly, the upward trend will continue in the foreseeable future. To reverse the trend additional incentives are needed, which are not yet available. At the same time, it is possible that the price maximum has been reached and the trend will lose its intensity in the future. In any case, at the moment, we can see the beginning of a price correction. The Swedish Krona began strengthening 5 days ago. The decline will probably be to the level 9,5735 - 9,5545 SEK. Therefore, the deals to SELL will be the most effective. Oscillators (Stochastic, MACD, RSI) also unanimously indicate the efficiency of short deals.
