USDSEK found finally support today at two-month lows after the recent sharp sell-off from record highs on March 20. The correction accelerated on Monday after the pair breached below the 100-day moving average.
Sweden’s death rate is the highest in Europe, with 6.08 deaths per million in the previous week compared to 5.57 in Britain and 4.28 in Belgium. But the Swedish economy has taken a smaller hit than the UK as Sweden’s has only one week of lockdown. Swedish retail sales increased in March as shops remained open, while the construction sector also grew.
Recent data showed that the economic slowdown in Sweden in the Q1 was less severe than elsewhere in Europe, a contraction of 0.3% versus 3.8% in the eurozone. Analysts expect that Sweden’s economy will shrink by 7% in 2020 and looks like it has avoided the worst keeping the economy open.
Riksbank forecasts an economic contraction of between 7% and 10% for this year and unemployment of between 9% and 10%. In 2019 the jobless figure was 6.8%.
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USDSEK is 0.18% higher at 9.5954 after tested earlier today the 23.6% Fibonacci retracement. The risk-on sentiment drove the pair to bearish waters as this week broke below the 100 and 200-day moving averages. The technical outlook is bearish now, and only a return above the 20-day moving average might cancel the negative momentum.
On the upside, initial resistance for USDSEK will be met at 9.6280 the daily top. A break above might attract more bids for an attempt to the next resistance level at 9.6990 the 200-day moving average. The next supply zone is at 9.7599 the 100-day moving average.
On the other side, the first support for the USDSEK stands at 9.5708 the daily low. The next support area might emerge at 9.4955 the March 12 lows. Next support stands at 9.4280 the low from March 11.