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Senior Analyst at Danske Bank Jens Pedersen suggested the cross should remain in a rangebound theme within 10.20 and 10.40 for the time being.

Key Quotes

“In the Scandi universe, we still see EUR/SEK largely a 10.20-10.40 range-play ahead of year-end. The recent drop in EUR/SEK towards 10.30 in our view poses an opportunity to play some (limited) upside via options as a new election looms, Riksbank pricing is vulnerable to global risk sell-offs, and seasonality factors could weigh on SEK”.

“Combined with cheapish vol in the cross, we thus recommended a bullish 2M EUR/SEK call spread. That said, we maintain that rallies above 10.40 in the cross would be an opportunity to go short for a move towards 10.20 into the December Riksbank meeting”.