EUR/SEK entering oversold territory – Danske Bank

Aila Mihr, Analyst at Danske Bank, noted the Swedish Krona has probably been appreciating faster than expected in recent weeks.

Key Quotes

“EUR/SEK also continued to edge lower, still hand in hand with repricing of relative yields but at odds with the negative risk sentiment”.

“The market may want to price in a more front-loaded hike path from the Riksbank, supporting a lower EUR/SEK; however, pricing is already ahead of the Riksbank”.

“While we continue to be strategically bullish on the SEK, we are wary of a short-term correction. Technically, the pair is getting somewhat oversold, with key support just above 9.40 (August 2016 low). We target the cross at 9.50 and 9.40 in 1M and 3M, respectively”.