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27 Feb 2015
USD/SEK correction towards 8.15 expected – SG
FXStreet (Barcelona) - The Research Team at Societe Generale suggests USD/SEK offers better risk reward opportunities to trade a near-term USD correction, expecting a break below 8.27/30 to target 8.15 and then 8.05/8.06.
Key Quotes
“For those looking to trade a near-term dollar correction, USD/SEK offers good risk reward to be short USD tactically, in our view.”
“Technically, USD/SEK has been trading in an 8.30-8.50 range for more than two weeks. A break below 8.27/8.30 would suggest a deeper correction towards 8.15 and perhaps to 8.05/8.06, where the 200-day moving average lies currently.”
“Sell USD/SEK spot, targeting 8.06 with a stop on a close above 8.50.”
“More fundamentally, the minutes of the Riksbank policy meeting that gave rise to the surprise negative repo rate and QE programme were less dovish than expected. The Riksbank’s board members also recently published an op-ed piece in a Swedish newspaper stating that they “now see signs that inflation is starting to rise”.”
“While we expect the Riksbank to pursue further easing measures over the course of the year, the near-term outlook for monetary policy is more clouded now.”
Key Quotes
“For those looking to trade a near-term dollar correction, USD/SEK offers good risk reward to be short USD tactically, in our view.”
“Technically, USD/SEK has been trading in an 8.30-8.50 range for more than two weeks. A break below 8.27/8.30 would suggest a deeper correction towards 8.15 and perhaps to 8.05/8.06, where the 200-day moving average lies currently.”
“Sell USD/SEK spot, targeting 8.06 with a stop on a close above 8.50.”
“More fundamentally, the minutes of the Riksbank policy meeting that gave rise to the surprise negative repo rate and QE programme were less dovish than expected. The Riksbank’s board members also recently published an op-ed piece in a Swedish newspaper stating that they “now see signs that inflation is starting to rise”.”
“While we expect the Riksbank to pursue further easing measures over the course of the year, the near-term outlook for monetary policy is more clouded now.”