We see Risks Bank monetary policy meeting announcement at 9.30 local time. The Executive Board’s interest rate decision will be published, together with the Monetary Policy Report, followed by Press conference at 11.00.
Back in July meeting, the Executive Board has decided to keep the repo rate unchanged at -0.50%. The report also noted the economy is strong, and inflation is at the target of 2 percent. However, as before, inflationary pressure is moderate. We expect a modest dovish to neutral tone in today’s meeting.
The Swedish Krona fell more than a percent since July policy review against the USD and EUR. After hitting a high in August, the crosses EURSEK and USDSEK fell nearly 2.0%.
- USDSEK: Supports are at 9.0340 below here, 9.0000 exists. A break of these would be needed to initiate further retracement to 8.9830 and 8.9550 its 50MA.
Resistances at 9.0925, 9.1630 and 9.1880. The erosion of these thresholds would be needed to initiate a more pronounced recovery to August high 9.2470 and 9.3280. The daily RSI has been propelling down, and the oscillator is remaining bearish. Under these conditions, a recovery back above 9.1880 still seems difficult.
- EURSEK: Selling pressure remains very strong, a descending channel is still in evidence in the daily chart. These dips would enable the cross to gather momentum ahead of a new round of rallies. The oversold indicators on the H4 chart indeed plead for another test of the resistance 10.60. A break of this would be needed to rally further to 10.63 and 10.67.
The daily studies RSI and oscillator are remaining bearish while the cross manages to hold its 20MA. More selling would come only below 10.50 for 10.40 and 10.37.
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