Near 10.1800, EUR/SEK tested the 200-day SMA.
On Thursday, the Riksbank kept the benchmark rate steady.
At its event, the central bank sent out a dovish message.
On Thursday, the Swedish krona reverses some of its recent gains, allowing EUR/SEK to resume its upward trend.
EUR/SEK has now completed two daily pullbacks in a row, re-testing the crucial 200-day SMA around the 10.1800 level, only to lose momentum shortly after.
The cross’s corrective move occurred after the Riksbank’s dovish remark at its monetary policy meeting earlier in the day on Thursday.
In fact, the Nordic central bank argued for the existing accommodative monetary policy to be maintained, even though it raised its GDP predictions to 4.2 percent in 2021 (from 3.7 percent) and 3.7 percent in 2022. (from 36 percent ). In terms of inflation, the Riksbank now expects the CPIF to be 1.8 percent this year and 1.7 percent the next year, up from 1.5 percent and 1.4 percent last year.
Furthermore, the Riksbank stated that, in tandem with a stronger economy, inflationary pressures are projected to rise up in the coming years. The key rate is expected to remain at present levels for the duration of the forecast period, according to the central bank.
The Swedish economy’s growth prospects are strengthening, and positive outcomes in key fundamentals are projected to provide additional support to SEK in the coming months. Against this rosy economic background, the Riksbank’s continued accommodative attitude, as well as the lack of other signals in its message (like tapering prospects? ), are somewhat surprising. Meanwhile, the SEK is anticipated to keep a tight eye on inflation, as the Riksbank now expects consumer prices to rise in the coming months.
So far, spot is up 0.23 percent at 10.1621, with a break over 10.1753 (200-day SMA) exposing 10.2402 (monthly high June 18) ahead of 10.2964. (2021 high Apr.5). The next support, on the other hand, appears at 10.1006 (low Jun.24), followed by 10.0815 (low Apr.19), and finally 10.0401. (low Jun.10)./n
