According to Nordea economist, Torbjorn Isaksson: ‘The service sector is more resilient than we thought. We, like the Riksbank, had expected GDP to fall by 10% in the second quarter, but now it looks to be better than that.
Technical View: Testing a major support at 8.60, it will be hard for the pair to break below this level as buyer seems to take charge. Back in August’20 we have seen a consolidation around this region. It will be fair to say USD/SEK might change its course after a long downward trend started from Mar’20. A confirmation would only be on the table if the pair breaks above the major resistance at 8.80, which would signal a break in the downward trendline. Now I have a neutral bias on the pair, until it breaks below 8.60 convincingly. On the contrary if the price action suggests another bounce from the current level, a target at 9.2850 looks a good with both the 200DMA & 38.20% Fib coincides at that level, so we might find some resistance at those price levels.
Please keep in mind the Sveriges Riksbank will be publishing its Monetary Policy Report along with Rate decision next Thursday, so any major moves before that is unlikely.
