USD/SEK clears daily losses as the USD hold its gains despite weak ADP figures

• The USD/SEK hovers near the 10.470 mark after declining to 10.43 earlier in the session.
• US's ADP Employment Change reported in November stood at 103K, lower than expected.
• Markets await Jobless Claims on Thursday and Nonfarm Payrolls from the US on Friday.

The USD/SEK traded lower in Wednesday's session, declining by 0.18% to 10.470. The pair suffered from the impact of weaker-than-expected Automatic Data Processing Inc. (ADP) employment figures, while the USD remained stable, which limits the downside. 

In line with that, the Employment Change indicator shared by ADP  during November highlighted an increase of job creation in the private sector of 103K against a consensus expectation of 130K, coming in slightly below their preceding value of 106K.

On Friday, traders will get additional data on the labor market to continue placing their bets on the next Federal Reserve (Fed) meeting, with the Bureau of Labor Statistics reporting three key reports . The Average Hourly Earnings are expected to inch up to 0.3% from the previous 0.2%. Moreover, the Nonfarm Payrolls are expected to land at 180K, a significant improvement from the prior figure of 150K while the Unemployment Rate, expected to stand at 3.9%. Weekly Jobless Claims are due on Thursday.

These releases will give markets further insights into the American labor market's performance and could influence upcoming Fed decisions and, hence, set the pace of the short-term price dynamics of the pair. As for now, markets bet on a no hike for the next December 15 meeting, and forecast rate cuts by mid-2024.

USD/SEK levels to watch

The daily chart indicators reflect the recent push made by the bulls stagnated. The Relative Strength Index (RSI) is flat and sitting in negative territory, and the Moving Average Convergence Divergence (MACD) showcases flat green bars. This suggests a lack of strong momentum in either direction, indicating that the markets are potentially in a consolidation phase.

Although the short-term outlook might seem negatively skewed due to the current positioning of the RSI, it’s important to note that the pair is comfortably perched below its 20, 100, and 200-day Simple Moving Averages (SMAs), suggesting that the bears are overall in command.

Support Levels: 10.300, 10.245, 10.180.
Resistance Levels: 10.510 (20-day SMA), 10.595, 10.665.

USD/SEK daily chart