EUR/SEK within a narrow range near 9.5000

The Swedish Krona is alternating gains with losses vs. its European peer on Wednesday, with EUR/SEK gravitating around the 9.5000 handle.

EUR/SEK attention to Riksbank, ECB

The cross is up for the second session in a row so far this week, looking to prolong the rebound from last week’s multi-month lows in the 9.4500 neighbourhood, although further gains are expected to face initial resistance in the 9.5140/9.5200 zone, where sit Tuesday’s tops and the 21-day sma.

SEK derived further selling pressure after Swedish industrial production contracted at a monthly 0.9% during July and 5.3% over the last twelve months, coming down from gains of 0.9% and 8.9%, respectively.

Further data saw industrial new orders expanding at an annualized 2.1%, down from June’s 3.7% gain.

SEK should remain under pressure in light of the upcoming ECB and Riksbank meetings on Thursday. Market consensus expects both central banks to keep their monetary conditions unchanged, although speculations on a dovish tone by Draghi have been gathering traction as of late.

Regarding the Riksbank, analysts at Danske Bank noted: “The next key event in the Scandi market will be the Riksbank meeting tomorrow, where we do not expect any changes in the rate, rate path or any new communication about QE. We still expect EUR/SEK to remain range-bound near term”.

EUR/SEK levels to consider

As of writing the cross is up 0.09% at 9.5022 facing the next up barrier at 9.5139 (high Sep.5) seconded by 9.5206 (21-day sma) and finally 9.5362 (23.6% Fibo of the June-September drop). On the flip side, a breakdown of 9.4600 (low Sep.5) would aim for 9.4504 (low Sep.1) and then 9.4503 (low Mar.17).