Swedish Krona appreciates, adding to yesterday’s gains and is now dragging EURSEK price to the area of multi-week lows in the 10.4200 region.
March 20, GKFX – The cross is down for the second consecutive session so far on Wednesday and is navigating levels last seen in early February near the 10.4200 handle.
Positive risk-appetite trends continue to lend support to the beleaguered Krona, which is extending the correction higher after hitting fresh yearly lows near 10.6500 at the beginning of March.
SEK regained buying interest as of late after Riksbank’s members have considered the recent slowdown in inflation and other fundamentals as temporary, favoring the slow appreciation of the Krona in the future.
What to look for around SEK
Fundamentals in the Scandinavian economy remain healthy, although the projected global (and particularly the EMU) slowdown is expected to have its say on the performance of the domestic economy in the next months. SEK is also facing extra headwinds as market participants consider it a funding currency when comes to carry trade.
Additionally, concerns over the global slowdown and the softer stance from the ECB could encourage the Riksbank to remain ‘lower for longer’, in spite of recent comments by board members suggesting a rate hike this year still remains well on the table.
EURSEK technical analysis
As of writing the cross is losing 0.23% at 10.4240 and a break below 10.4129 (55-day SMA) would expose 10.4036 (low Feb.13) and then 10.3670 (200-day SMA). On the flip side, the next up barrier aligns at 10.5096 (10-day SMA) seconded by 10.6314 (high Feb.21) and finally 10.6476 (2019 high Mar.8).
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