Date: 07 May 2019
The EUR/SEK pair breached the 2018 highs in the area at SKr10.7285 on Monday, and with prices above SKr10.7380, the pair climbed to its highest point for ten years.
Macroeconomic factors, such as fears of the trade dispute between the US and China escalating, could be playing a role.
Adding to those factors, at its last central bank meeting at the end of April, the Swedish central bank decided both to leave its key interest rate at minus 0.25 per cent and to extend the purchase of government bonds. This has put the Swedish krona under pressure.
A glance at the chart shows that the currency pair has worked its way up with two movements since the beginning of the year. The current, relatively steep upward movement was initiated with the Swedish central bank meeting on 25 April. On that day, the market rose by more than one per cent and leapt from SKr10.50 to SKr10.63 without any problems.
Both lines of the MACD oscillator are wide open. However, the histogram shows the first signs of a flattening.
The high from the end of August 2018 of around SKr10.72 is likely to be decisive for the next few days. If the euro-bulls manage to drive the market higher, structural resistance in the regions could be at SKr10.7779, SKr10.842, and SKr10.904.
However, if the old highs prove too much for the market, yesterday’s low in the area of SKr10.70 could provide initial support. Further support could then be found in the areas of SKr10,639, SKr10,592, SKr10,501, and SKr10,472.
The bullish trendline should also be considered as a support for the market.
EURSEK Daily Chart | Source ActivTrader
Written by Daniel Schuetz, External Analyst, ActivTrades
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