EUR/SEK drops to session lows near 10.36

• The Swedish currency appreciates further to the 10.3700 area today.
• SWE CPIF rose in line with consensus at 1.9% on a yearly basis.
• The cross drops to fresh 3-week lows after inflation figures.

The Swedish Krona is gathering further traction on Wednesday and is dragging EUR/SEK to test fresh multi-day lows in the 10.3620 region, just to rebound a tad afterwards.

EUR/SEK lower on technicals, CPI

After reaching multi-year peaks in the 10.70 neighbourhood earlier in the month, the cross sparked a correction lower mainly on the back of the strong overbought reading as per the daily RSI.

Today’s inflation figures matched initial estimates and appear to have somewhat collaborated with the better tone around the Scandinavian currency.

In fact, inflation tracked by the CPI rose at an annualized 1.7% in April and 0.4% inter-month, while further data saw CPIF (CPI at constant interest rates) rising 1.9% over the last twelve months and 0.4% MoM.

Adding to SEK buying, the recent publication of the Riksbank minutes showed a board member not ruling out a rate hike at the September meeting, while the repeated mention of a weak SEK could be indicative of some anxiousness around the Nordic central bank.

It is worth mentioning that the Riksbank noted in its latest statement that it now contemplates higher rates at some point by year end, later than initially estimated.

EUR/SEK levels to consider

As of writing the cross is losing 0.78% at 10.3815 and a breach of 10.3574 (low Apr.19) would expose 10.2833 (55-day sma) and then 10.2503 (low Apr.10). On the other hand, the next hurdle is located at 10.5295 (10-day sma) seconded by 10.6956 (2018 high May 3) and finally 11.1249 (monthly high July 2009).