EUR/SEK breaks out
Fawad Razaqzada October 7, 2019 4:47 PM
The Swedish krona continues to hit new lows against her major rival, the euro.
The EUR/SEK broke to a new 2019 high earlier after clearing major resistance in the 10.85 zone. The krona’s ongoing weakness is a reflection of the market’s disagreement with Swedish central bank – the Riksbank – which had projected higher interest rates, despite all other major central banks turning dovish.
Thanks to soft domestic data and a slowing global economy, investors are increasingly doubting the central bank it will go ahead with projected rate hikes. Indeed, some have suggested that the Riksbank may even do a U-turn on interest rates and loosen – rather than tighten – monetary policy at the end of the year. With growth weakening in the Eurozone and China, and as exports account for almost half of the nation’s GDP, this may not be a bad shout after all.
Today’s breakout above the 10.8500 level means the technical path of least resistance continues to be to the upside for the EUR/SEK. Once resistance, this level could be the new key support to watch going forward. Generally, for as long as rates remain above the 10.8245-10.8500 area, the bulls should remain in control – so a bit of deviation from the noted 10.8500 level should be okay. However, if price breaks below the aforementioned range, then in that case a return to the next key support at 10.7290 cannot be ruled out.
Source: eSignal and FOREX.com.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.