EUR/SEK bounces off monthly lows around 10.40

• The Swedish Krona trades slightly on the defensive around 10.42.
• Consumer Confidence improved to 94.0 in March.
• Trade surplus widened to SEK 5.0 billion in February.

After dropping to the 10.40 neighbourhood earlier in the session, EUR/SEK met dip-buyers and is now trading back on the positive ground in the 10.42 area.

EUR/SEK up from monthly lows

SEK keeps the area of multi-week lows with contention in the key support at 10.40 the figure against the backdrop of renewed sentiment surrounding the Scandinavian currency.

The Krona also gathered traction during early trade after Sweden Consumer Confidence improved to 94.0 for the current month and despite Manufacturing Confidence ticked lower to 107.5 for the same period.

Further domestic data releases saw Household Lending Growth expanding at an annualized 5.3% on a year to February (from 5.4%) and the trade surplus widening to SEK 5.0 billion from SEK 3.1 billion in January.

What to look for around SEK

Fundamentals in the Nordic economy remain solid for the time being despite some deterioration in the domestic outlook and speculations that the Riksbank could stay ‘lower for longer’. However, the Scandinavian central bank did not ruled out a rate hike by year-end (yet). SEK is also facing extra headwinds as market participants consider it a funding currency when comes to carry trade.

EUR/SEK levels to consider

As of writing the cross is up 0.08% at 10.4197 and faces the next hurdle at 10.4487 (10-day SMA) followed by 10.4969 (high Mar.22) and then 10.4981 (21-day SMA). On the flip side, a break below 10.4056 (low Mar.27) would expose 10.3738 (200-day SMA) and then 10.3599 (100-day SMA).