Sweden's central bank's rate hike may not be enough
Technical Analysis Summary USD/SEK: Buy
| Indicator | Value | Signal |
| RSI | Neutral | |
| MACD | Buy | |
| MA(200) | Neutral | |
| Fractals | Buy | |
| Parabolic SAR | Buy | |
| Bollinger Bands | Neutral |
Chart Analysis
On the daily timeframe, USDSEK: D1 is in a long-term uptrend and has come out of the triangle. Technical analysis indicators formed signals for further growth. We do not rule out a bullish movement if USDSEK: D1 rises above its latest high (since March 2020): 10.38. This level can be used as an entry point. Initial risk cap is possible below the last three down fractals, the Parabolic signal and the lower Bollinger band: 9.73. After opening a pending order, we move the stop following the Bollinger and Parabolic signals to the next fractal low. Thus, we change the potential profit/loss ratio in our favor. The most cautious traders after making a trade can switch to a four-hour chart and set a stop loss, moving it in the direction of movement. If the price overcomes the stop level (9.73) without activating the order (10.38), it is recommended to delete the order: there are internal changes in the market that were not taken into account.
Fundamental Analysis of -
Sveriges Riksbank raised rates last week. Will the USDSEK quotes continue to rise?
The rate was increased for the 2nd time in a row, immediately by 0.5% to 0.75%. The next meeting of Sveriges Riksbank will take place only on September 20th. Meanwhile, inflation in Sweden in May is much higher than the rate. In May, it reached a maximum for 31 years and amounted to 7.3% y/y. The Sweden Consumer Price Index for June will be published on July 14th. According to investors' forecasts, inflation will rise to 8.2% y/y. The Riksbank expects it to be above 7% by the end of 2022. The Swedish Central Bank also downgraded its GDP growth forecast from 2.8% to 1.8% in 2022 and from 1.4% to 0.7% in 2023. All this can have a negative impact on the exchange rate of the Swedish krona.