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USD/SEK: Review & Forecast

Published on: 03/03/2017

Once again the trend for the USD/SEK pair has changed from a downward to an upward one. Nowadays this happens quite often with the USD/SEK. The dollar went on the offensive and became stronger against all currencies. The euro, in turn, is losing positions which also affects the value of the Swedish Krona, which is strongly dependant on the EU economy.

This week the dollar reached its highest level in two months, thanks to statements by members of the Federal Reserve about the necessity of a rate increase. In addition, there was another positive factor - a reduction in the number of people claiming unemployment benefits by 19,000 in a week. Other statistics about the U.S. economy also inspired investors.

On the other hand, Sweden doesn't have problems with its economy. However, there are no factors that would have allowed the Swedish krona to stop the onslaught of the dollar, if it is even possible at this point. The latest data on the economy shows a GDP growth of 1% over the last quarter of 2016 and an increase in the trade surplus to 1.5 billion SEK in January, which is 100% more than the level achieved a year earlier. Exports grew by 19% and exceeds the growth rate of imports by 1%.

USD/SEK: H4 chart
As mentioned above, the USD/SEK rates are in the frames of an upward trend, which was formed just a month ago. There are no preconditions for a new trend reversal yet, although the trend may lose intensity due to the dollar's achieving a peak in the near future. New statistical data on the Swedish economy which should be published soon might be able to stop the trend.

The Stochastics and MACD oscillators are neutral. In this situation, the best course of action would be to open the deals on the trend (BUY).

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