EUR/SEK Monthly
Swedish krona gained some quick points on Tuesday after Swedish inflation data but its big picture downward trend is intact. IBTimes UK/FXStreet

The Swedish krona strengthened against majors on Tuesday as the country recorded a higher than expected inflation rate at the end of 2014.

Sweden continued to see persisting deflation but the rate was less than expected with the monthly CPI rate rebounding to positive territory, data showed.

Year-on-year, the CPI rate was -0.3%, down from -0.2% in November, but higher than the market consensus of -0.6%. The monthly rate came at 0.2%, up from -0.1%.

The inflation data to some extent helped to offset the impact of Friday's weaker than expected industrial output data. Output has fallen 5% from a year earlier in November.

The USD/SEK dropped to 8.0 after the data from 8.08 prior. The EUR/SEK fell to 9.56 to 9.48.

Against the euro, the krona had touched a 4-1/2-year low of 9.73 last month but has been trading off the lows in the new year, also helped by broad losses in the common currency.

At the same time, the Swedish unit is trading at weaker levels from the December closing level, practically continuing the downward trend early 2013.

For the EUR/SEK, the first resistance level beyond the December high of 9.73 is 10.03 and then 10.53. Only a break below 9.0 will weaken the uptrend of the cross.

The USD/SEK on the other hand, has been continuing the uptrend in the new year, hitting a 4-1/2-year high of 8.1073 on Monday. The Swedish inflation data has pulled it back to 8.0006.

With the uptrend since March this year continuing, the pair next aims 8.1378, the 2010 peak. A break of that will take it to its highest since April 2009 and the next resistance will be 8.2845.