Positive start to the week but EUR/SEK faces big hurdles
Oct 15 (Reuters) -Range trading has taken the wind out of the Swedish crown's sails and left it vulnerable to EUR/SEK rebounds but while big resistance levels are intact the EUR could struggle to make headway.
EUR/SEK has been moving out sideways since the sharp rally from 11.2450, double day lows of Sept. 23-27. The market peaked at 11.4000 and has struggled to push above this level so far in October. The 100 and 200-day moving averages are just above at 11.4090 and 1.4185, respectively.
Sentiment towards the crown has improved as inflation continues to moderate and the Riksbank focuses on economic growth.
A widely expected 25-basis point rate cut from the European Central Bank (ECB) this week would take some heat out of any November rate cut by the Riksbank. A deterioration in the eurozone economic backdrop might also influence post-rate cut ECB rhetoric.
Swedish inflation data due on Tuesday is expected to show CPIF rising just 1.1% year-on-year to September, down from 1.2% in August. The data could take the edge off any SEK recovery but the impact is likely to be fleeting at most.
EUR/SEK risks a drop under its 11.3310 range base this week.
For more click on FXBUZ
EUR/SEK daily candle chart: https://tmsnrt.rs/3YqUevX
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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