USD/SEK Retraces Following Swedish Election, but Upside Remains IntactSeptember 12, 2022
- USD-SEK price has exhibited massive bearishness lately.
- It has gained over 20% from this year’s lowest mark
- The next crucial catalyst is the coming US inflation statistics.
USD-SEK noted a massive pullback amid Monday’s session following the recent Swedish election. The pair plunged towards the 10.44 low, making its lowest mark since 18 August. Krona has gained over 4% from last week’s highest zone.
Swedish Political Era
The USD-SEK forex rate maintained a massive bearish bias following the weekend election. Early results indicated that the right-wing party group headed for victory. The Sweden Democrats led the parties and campaigned on crime and immigration issues.
They want to increase prison sentences & reduce immigration to the minimum. Moreover, they hope to introduce nuclear plans to alleviate the dependence on coal and natural gas. It will be the 2nd-largest party in the country.
The USD-SEK price will react to the coming US and Swedish consumer inflation stats. Sweden joined other European nations that had consumer inflation surging to decade-highs.
Economists expect Swedish inflation increased from July’s 8.5% to August’s 9.6%. Also, they trust the constant rates CPI hiked to 8.6%. Remember, the nation’s inflation increased to 8.7% during the June sessions.
Consequently, Riksbank retained a somewhat hawkish stance. It began hiking rates, and economists trust the trend will persist in the upcoming months. Also, the pair will react to the coming United States producer and consumer inflation data, coming on Tuesday & Wednesday.
Most analysts anticipate the United States inflation cooled briefly in August amid eased gasoline prices. Precisely, economists expect the headline inflation to have dipped from July’s 8.5% to September’s 8.1%. Nevertheless, the Federal will likely maintain hawkishness despite the easing inflation.
According to the 1day chart, the USD-SEK price exhibited a massive bullish trend within the previous few months. It has gained over 22% from November 2021 lowest mark. That had the pair moving beyond an ascending trend-line.
USD-SEK has climbed past the 50-d MA, whereas the Awesome Oscillator had its bars moving briefly downward. Thus, the pair might continue dropping, with sellers targeting the ascending trend-line before bullish trend resumption.