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USD/SEK falls as markets digest US retail sales and CPI figures.

  • The CPI and US retail sales were lower than expected.
  • The odds of a Fed cut in July increase slightly, with September still the best-case scenario.
  • Fed officials could change their tune amid weak economic numbers.

On Wednesday, USD/SEK posted heavy losses as the possibility of the Fed cutting interest rates early in light of recent consumer price index (CPI) disinflation and lackluster retail sales could weigh on the USD.

In terms of data, the US Bureau of Labor Statistics reported that the country had seen a marginal decline in inflation: the headline CPI fell from 3.5% in March to 3.4% in April. The core CPI also saw a drop, falling from 3.8% to 3.6%, in line with market expectations. On the other hand, US retail sales remained stagnant in April, a drop from the expected growth of 0.4%.

Cooling economic indicators imply that the Federal Reserve could contemplate an earlier start to the easing cycle, which would invariably put pressure on the USD. The CME FedWatch tool highlights that investors have already priced in that there will be no changes in interest rates in June, but they continue to welcome a cut in September. Those odds increase slightly for the July meeting, but remain low.

USD/SEK technical analysis

On the daily chart, the RSI for the USD/SEK pair is in negative territory. The latest reading, which marks a bearish trend, suggests that sellers are dominating. On the other hand, the moving average convergence divergence (MACD) is producing ascending red bars, demonstrating negative momentum.

That said, strong support was seen at the 200-day SMA, with buyers defending the 10.66 level. This defense acts as a crucial bulwark against any possible downward trend reversal.

EUR/JPY

Overview
Latest price today 168.37
Daily change today -0.87
Today's daily variation -0.51
Today's daily opening 169.24
Trends
daily SMA20 166.55
50 daily SMA 164.62
SMA100 daily 162.45
SMA200 Journal 160.61
Levels
Previous daily high 169.36
Previous daily low 168.47
Previous weekly high 167.97
Previous weekly low 164.48
Previous Monthly High 171.6
Previous monthly low 162.28
Daily Fibonacci 38.2 169.02
Fibonacci 61.8% daily 168.81
Daily Pivot Point S1 168.69
Daily Pivot Point S2 168.14
Daily Pivot Point S3 167.8
Daily Pivot Point R1 169.58
Daily Pivot Point R2 169.91
Daily Pivot Point R3 170.46

Source: Fx Street

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