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IronFX Essential Intraday Comment | 25/06/2015

• The dollar traded higher against most of its major counterparts during the European morning Thursday. It was higher against CHF, NZD, EUR, AUD and JPY, while it was lower against NOK. The greenback remained stable vs CAD, SEK and GBP.

• The Swedish krona gained early on following the rebound in the country’s monthly PPI rate in May, but lost the gains to trade virtually unchanged at midday. Coming on top of the unexpected rise in the CPI rate early this month, the rebound in the PPI eases the pressure from the Riksbank to cut rates deeper into the negative territory at their meeting next week. SEK could remain supported at least until the meeting, when an unchanged policy could add further to its strength. However, given that Sweden’s central bank prefers a weak currency, I would be cautious in case of any attempts to push down SEK with a dovish statement or expansion of their ongoing QE program.

• EUR came under renewed selling pressure as the Greek PM was given until 1200 GMT to reach a workable compromise or otherwise the creditors’ offer will be presented to the Eurogroup meeting as a “take it or leave it” choice. The pressure was heightened after the ECB decided to leave Greek banks’ ELA ceiling unchanged in order to intensify the pressure on the Greek government to accept the creditors’ offer. It seems like we are heading from a “Grexit” to “Grexident”, with both sides putting the blame on each other.

USD/SEK traded in a consolidative manner during the European morning Thursday, staying between the support line of 8.2000 (S1) and the resistance of 8.2750 (R1). Taking a look at our short-term oscillators, I would expect the forthcoming wave to be negative. The RSI headed lower after exiting its overbought zone, while the MACD has topped and could fall below its trigger line any time soon. A clear break below the 8.2000 (S1) is likely to confirm my view and perhaps challenge our next support at 8.1600 (S2). On the daily chart, I see that USD/SEK is trading below the uptrend line taken from back at the low of the 15th of August 2014, which keeps the medium-term outlook negative. However, there is positive divergence between both the daily momentum studies and the price action, revealing slowing downside momentum. As a result, I would prefer to hold a neutral stance as far as the longer-term outlook of USD/SEK is concerned.

• Support: 8.2000 (S1), 8.1600 (S2), 8.0900 (S3)

• Resistance: 8.2750 (R1) 8.3200 (R2), 8.3650 (R3)

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