The USD/SEK price held steady today after the relatively strong industrial production data ahead of the US nonfarm payrolls. The pair is trading at 8.4437, which is 4% above the year-to-date low of 8.1227.
Strong Swedish economic data
In a report today, the Swedish Bureau of Statistics said that the country’s industrial production data made a modest improvement in December. In general, the production increased by 1.4% after rising by 1.3% in the previous month. The production rose by 5.9% on an annualised basis as the new orders rose by 5.9%,
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
These numbers came in a week that we also received mixed economic data from the country. On Wednesday, Markit reported that the services PMI declined from 56.9 in December to 59.3 in January. Still, with the PMI being above 50, it is a sign that the sector continued to do well. Similarly, on Monday, data revealed that the manufacturing PMI was at 62.4 in January.
This week, the USD/SEK also reacted to the relatively weak GDP data from Sweden. According to the Swedish Bureau of Statistics, the economy rose by 0.5% in the fourth quarter. This was a decline from the previous quarter’s rebound of 4.9% and was blamed for the second wave of the virus. The economy contracted by 2.6% on an annual basis. As a result, some analysts believe that the Riksbank will likely delay its interest rate hikes.
Still, the recent price action of the USD/SEK is mostly because of the strength of the US dollar. The dollar index has risen by more than 2.45% from its lowest level this year as forex investors react to the rising market risks.
USD/SEK technical outlook
The USD/SEK price has been in a strong upward momentum in the past few days. On the four-hour chart, the pair has managed to clear the important resistance level at 8.4280. It has also formed an ascending channel that is shown in blue.
The current price is slightly above the lower side of the channel. It is also above the 15-day and 25-day exponential moving averages. Therefore, in the near term, the upward trend will likely remain so long as the price is above the two averages.