Rabobank’s Senior FX Strategist Jane Foley has highlighted the recent performance of the Swedish Krona (SEK) against the Euro (EUR), noting that the SEK has been the weakest G10 currency since the start of the Iran war. However, on a one-month view, the SEK has outperformed, becoming the best performing G10 currency since May 18 [1].
Foley points out that the EUR/SEK currency pair has encountered technical support at the 100-day simple moving average (SMA) of 10.76, which led to a modest bounce. Resistance is identified at the 50- and 200-day SMAs, both at the 10.85 level. This technical setup suggests that EUR/SEK is likely to trade within a range in the short term [1].
Looking ahead, Rabobank expects range trading in EUR/SEK over the next one to three months. The outlook for a breakout from this range depends on the trajectory of Sweden’s economic recovery and the potential for a more hawkish stance from the Riksbank. Should there be more concrete signs of economic recovery, Rabobank anticipates a moderately firmer SEK tone into the end of the year, with the possibility for the currency to regain moderate upward momentum in the latter months of the year [1].
CONCLUSION
Rabobank forecasts that the Swedish Krona will trade within a defined range against the Euro in the coming months, with technical levels at 10.76 and 10.85 being key. A moderately firmer SEK is expected by year-end if Sweden’s economic recovery strengthens and the Riksbank adopts a more hawkish stance.