USD/SEK declines on weak US employment data
- The SEK strengthened against the USD after the Riksbank's latest monetary policy decision to cut rates to 3.75%.
- Officials from the Federal Reserve are expressing wary about cutting rates.
- The USD traded weak on soft Jobless Claims figures.
The USD/SEK pair is trading lower, indicating bearish momentum for the pair despite the persistence of inflation and robust US economic performance aiding the Dollar's recovery which fuels hawkish bets on the Federal Reserve (Fed). The SEK was seen weak on Wednesday after the Riksbank decided to cut rates to 3.75% and signaled that more cuts may be incoming.
The US Dollar faced downward pressure following the release of disappointing Initial Jobless Claims data. During the week ending May 3, the number of individuals filing for jobless benefits for the first time rose to 231K, surpassing expectations of 210K and the previous reading of 209K, revised up from 208K. This uptick in jobless claims has heightened concerns about weakening conditions in the labor market. That being said, market expectations on the Fed didn’t change, and investors are still seeing the easing cycle starting in September. All eyes will turn to next week’s inflation data from the US which may likely set the tone for the market's expectations on the Fed.
USD/SEK technical analysis
On the daily chart, the Relative Strength Index (RSI) for the USD/SEK reveals a recent move within the positive territory but it points downwards. In addition, the MACD histogram indicates rising red bars, signifying a bearish momentum. The coexistence of the RSI's positive region and the MACD's red bars demonstrates that even though bullish players dominate the market price-wise, the overall trend may be losing steam, hinting at a potential shift in market momentum.
Highlighting the recent movements, the struggle of buyers to uphold the 20-day Simple Moving Average (SMA) at 10.88 may suggest a weak short-term trend. However, the long-term scenario looks strong, considering the pair's position above the 100 and 200-day SMA.
USD/SEK daily chart
