Sweden's crown in danger despite cloud support
Sept 10 (Reuters) -Following a EUR/SEK trend reversal on Aug. 30 the Swedish crown has been under increasing pressure and the outlook is dimming.
The daily EUR/SEK chart is showing potential for back-to-back Ichimoku cloud failures and the cloud base line, 11.4615, has slowed the SEK fall. However, the market has broken above the 200-day moving average and eyes the 100-day average, currently at 11.4838. A close inside the Ichimoku cloud could open up the average and trigger a climb to the 11.5900 cloud top.
Swedish economic growth is under scrutiny following weak data released early Tuesday. The monthly GDP indicator showed a 0.8% decline in July, negating the 0.8% gain for June. Falling July production data points to a difficult third quarter for overall growth.
Expectations are for Swedish growth to pick up later in the year, but the fragile domestic backdrop supports the Riksbank's rate cutting cycle, and this will likely limit any corrective recovery in the crown.
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EUR/SEK daily Ichimoku chart: https://tmsnrt.rs/3TmWYYg
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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