The Swedish Krona is poised to generate further traction in the near term, suggested Arne Rasmussen, Chief Analyst at Danske Bank.
Key Quotes
“EUR/SEK temporarily moved below 10.30 yesterday following strong NIER data and general EUR weakness”.
“Today’s retail sales data is a potential market mover too. In hindsight and with a quick look at the chart, we see that September has been as one directionally bullish for the SEK as August was one-directionally bearish”.
“Technically, a break of 10.30 opens for 10.24 (31 July low) and then 10.2280 200-day moving average. RSI suggests the cross is oversold”.
“Swedish data recently have been mixed at best, but there is no doubt the hawkish tweak of the Riksbank rhetoric has changed the appetite toward the SEK. We target 10.20 in 3M. Meanwhile, government formation seems stuck at the moment. We wouldn’t be surprised to see a comeback of the political risk premium associated to the risk of a snap election”.
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