USD/SEK finds resistance ahead of US and Sweden GDP data

The USD/SEK tilted upwards on Thursday after Sweden published relatively strong household lending, unemployment, and producer price index (PPI) data. The pair rose to 8.7040, which was slightly above this week’s low at 8.6758. 

Sweden economic data

The Swedish economy is doing relatively well even as Europe continues to face significant Covid-related challenges. On Thursday, the Swedish statistics agency said that household lending growth increased from 6.2% in June to 6.3% in July. This is an important number because it influences consumer spending, which is the biggest component of the Swedish economy.

Meanwhile, the country’s labour market also did well as more businesses reopened. The Swedish unemployment rate declined from 10.3% in June to 8.0% in July. This decline was the lowest it has been since November 2020. Analysts expect that the strong performance will continue as the country ramps up its vaccination program.

The USD/SEK pair also rose after the relatively strong Swedish PPI data. According to the country’s statistics agency, the PPI increased from 1.5% in June to 2.7% in July on a month over month basis. This increase, in turn, led to an annualised increase of 13.5%. This was the biggest increase since 2019. A higher PPI tends to translate into a relatively high CPI number. 

The Swedish statistics agency will next release the latest retail sales and GDP numbers on Friday. The recent data showed that the country’s economy rose by 10% while retail sales increased by 8.5%. 

The next key catalyst for the USD/SEK pair will be the second preliminary GDP data from the United States that will come out later today. The country’s statistics agency will also release the latest initial jobless claims and PCE data. 

USD/SEK forecast

The daily chart shows that the USD/SEK pair dropped to a low of 8.1166 early this year. Since then, the pair has been in a strong bullish trend and is now slightly above the 23.6% Fibonacci retracement level. The pair is also being supported by the 25-day and 50-day exponential moving averages (EMA). 

Notably, the pair has found a strong resistance slightly below 8.7595, which was the highest level in April this year. Therefore, the pair will likely maintain a strong bullish trend in the next few days as bulls eye the 50% retracement level at 9.2980.