COMMENT-Swedish crown entering a consolidation phase

Until the U.S. Federal Reserve and European Central Bank start cutting interest rates and the Riksbank outlook becomes clearer, the best the crown can hope for is consolidation.

A fragile Swedish economy and the prospect of a Riksbank rate cut have weighed on the crown but the market appears reluctant to push the SEK lower from current levels.

EUR/SEK has been on a downward trajectory since peaking at 11.4250 on January 18. Volatility clouded direction but an eventual drop to lows of 11.1410 and 11.1420 set the SEK up for further gains. However, as uncertainty grips the rates market EUR/SEK may have laid down range markers with a period of sideways price action taking hold.

A thin and sideways biased daily Ichimoku cloud provides a range ceiling, the base currently at 11.2405. Feb. 22 and Mar. 8 11.1410 and 11.1420 lows giving an area of support.

Weekly action also contained topside by an Ichimoku cloud, base at 11.3385. The cloud is rising and has an 11.4620-11.4913 June twist, which could attract the market. A major support point is at 11.00, the December 2023 low.

Swedish February inflation data is due Thursday and soft numbers are expected, which could push EUR/SEK towards its range high.