Stefan Ingves, CEO of Riksbank, expressed satisfaction with the condition of the Swedish economy. CPI inflation in the projection period should stabilize around the inflation target, he said, allowing a debate on the future of QE in the coming months. The forecasts made by Riksbank assume a rate hike in mid-next-year. The strength of the Swedish Krona, which weighs on the dynamics of the observed price pressure, remains a factor weighing on the decisions of the Swedish decision makers. Ingves' second term as governor expires at the end of the year. The appointment of a new governor has been seen by many as an opportunity for rate-setters to reassess a policy that is closely associated with him.
It is worth to remember, that Swedish Central Bank (Riksbank) has come in for widespread criticism in recent years, first for raising interest rates too fast after the financial crisis and more recently for keeping negative rates and an ultra-expansionary policy despite a surging economy and the threat of a housing bubble.
Let's now take a look at the EUR/SEK technical picture at the H4 time frame. Since Monday, EUR / SEK did not record one down session, which at the current trajectory of oscillators suggests the end of Friday quotations just below 161% of the external Fibonacci retracement at 9.7600. In the event of a break out above this level, the market should try to test the recent technical resistance from May and June in the range of 9.8043-9.8453. The closest support remains today's lows at 9,7036. If this level is violated, then the possibility of the golden trend line test from the upside will be very high.
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