- EUR/SEK tested the 200-day SMA near 10.1800.
- The Riksbank left the key rate unchanged earlier on Thursday.
- The central bank delivered a dovish message at its event.
The Swedish krona reverses part of the recent strength and helps EUR/SEK to resume the upside on Thursday.
EUR/SEK appreciates post-Riksbank
EUR/SEK now leaves behind two daily pullbacks in a row and manages to re-test the key 200-day SMA in the 10.1800 area, just to lose some momentum soon afterwards.
The corrective move in the cross came after the Riksbank delivered a dovish message at its monetary policy gathering earlier on Thursday.
In fact, the Nordic central bank advocated for the continuation of the current accommodative stance in monetary policy, although it revised up its forecasts for GDP to 4.2% in 2021 (from 3.7%) and 3.7% in 2022 (from 36%). Regarding inflation, the Riksbank now see the CPIF at 1.8% this year and 1.7% in the next one, from 1.5% and 1.4%, respectively.
Furthermore, the Riksbank noted that inflationary pressures are expected to pick up pace in the next years in tandem with a stronger economy. The central bank sees the key rate at current levels for the entire forecast period.
What to look for around SEK
Growth prospects for the Swedish economy keep improving and remain propped up by solid results in key fundamentals, which are in turn expected to lend extra support to SEK in the next months. Against this auspicious economic backdrop, it surprises somewhat the persistent accommodative stance from the Riksbank as well as the absence of other signals in its message (like tapering prospects?). SEK, in the meantime, is expected to closely watch the developments in inflation, as the Riksbank now sees consumer prices increasing in the next months.
EUR/SEK levels to consider
So far, spot is gaining 0.23% at 10.1621 and a breakout of 10.1753 (200-day SMA) would expose 10.2402 (monthly high Jun.18) ahead of 10.2964 (2021 high Apr.5). On the other hand, the next support emerges at 10.1006 (low Jun.24) followed by 10.0815 (low Apr.19) and finally 10.0401 (low Jun.10).
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