USDSEK rebounds today from 25-month lows as the USD finally receiving some bids. On the economic data front from Sweden, the Retail Sales came in at 1% topping the expectations of 0% in June. The yearly reading for Retail Sales registered in at 3.5% above the expectations of 1%. Retail sales is the sector of the economy left unaffected by the coronavirus outbreak as people spend more on food as they spend more time working from home. Meanwhile, the Sweden Trade Balance came in at 4.9 billion in line with expectations in June.
Yesterday, the Durable Goods Orders in the USA came in at 7.3% topping the forecasts of 7.2% in June. The Durable Goods Orders excluding Defense came in at 9.2%, below the estimates of 18.6%. The Dallas Fed Manufacturing Index improved from to -3 in July from -6.1 in June as the lockdown restrictions eased in Texas in June.
USDSEK traders await fresh signals from the FED meeting and the decision on Wednesday. Analysts expect that the Fed will keep rates unchanged and it will reiterate it’s will to provide more monetary support as the rising number of new infections threatening the recent economic recovery.
USDSEK is 0.51% higher at 8.7659 bouncing from the 25-month lows that hit yesterday. The USD weakness has pushed the pair to lower levels against most of the major and emerging markets currencies. The Relative Strength Index (14) trades in oversold levels since July 17, and bears should be careful as we might experience a sharp reversal.
If we look at the daily graph, the pair needs to break above the daily high at 8.7925 first and then above yesterday’s high at 8.8461 to give bulls some hopes for a reversal of the recent bearish trend. What can cancel the negative momentum is a credible close above the 50-day moving average at 9.2507.
On the flip side, the first support for the USDSEK will be met at 8.7101 the daily and 25 month lows. The next support zone for the pair might emerge at 8.7515 the low from September 24, 2018.
