The Swedish central bank, Riksbank, decided to keep its policy rate unchanged at 1.75% this morning, signaling that it is not in a hurry to tighten monetary policy further following more favorable inflation data in recent months [1]. In response, the EUR/SEK currency pair has been rebounding from an interim low near 10.50 and is now testing its 200-day moving average, a technical level that has acted as resistance since last year [1].
Societe Generale analysts highlight that the recent pivot high of 10.90 serves as the first resistance level for EUR/SEK. Should the pair break above this threshold, further upside could be possible, with the next targets identified at the October and November highs around 11.05 to 11.10 [1]. However, they caution that maintaining support at the April low near 10.74 is essential to prevent a deeper pullback in the cross [1].
The Riksbank's decision and the technical positioning of EUR/SEK suggest a cautious market outlook, with traders closely watching key resistance and support levels for potential direction [1].
CONCLUSION
The Riksbank's decision to hold rates at 1.75% and its cautious stance have contributed to a rebound in EUR/SEK, which is now testing significant technical resistance. Market participants are monitoring whether the pair can break above the 200-day moving average or if a deeper pullback will occur, depending on the defense of key support levels.