The Swedish Riksbank maintained the main interest rate unchanged at -0.50% in line with expectations. A surprise for the pessimistic market was that the bank maintained its position that it would start raising interest rates "at the end of the year". The market assumed that after the dovish position of the ECB from June and postponed the date of the increase, the Riksbank would follow in its footsteps. In addition, Floden joined the board member of Ohlsson in his objection to the decision to allow intervention on the currency market.
In conclusion, global investors might feel disappointed as the Riksbank did not give a clue regarding the next possible interest rate hike like the ECB did. Nevertheless, it is still very unlikely for Riksbank to hike before the ECB will hike first. There must be a clear sign from the ECB regarding the next monetary policy move until then all the possibilities regarding the hike are pure speculation.
Let's now take a look at the EUR/SEK technical picture at the H4 time frame after the decision was made. EUR/SEK drops from 10.42 to 10.31, probably under pressure from massively closed short positions in the crown. The level of 38% Fibo retracement has been broken and now the price is likely to drop towards the next retracement at the level of 10.28. Overbought market conditions and weak momentum support the temporary bearish outlook.
