steve.jarvis's picture

Looking good for the Swedish Kronor?

It's been quite a while since I gave a broad outlook for the Swedish Kronor.  It was at or near the bottom of my Currency rankings from late October until early May, but since then has quickly moved towards the top of the list and currently sits just below the Euro, Sterling & Swiss Franc.  The question is, can the Swedish Kronor sustain this recent improvement, or are we looking at a mere temporary change in fortunes which may not have very much longer to last?

Going through each of the main SEK FX pairings one by one, there are several observations which I think are worthy of note.  In most cases there has been a golden cross of the 22 & 65 day (1 & 3 month) moving averages, accompanied in many cases by a broadly positive MACD indicator, although short-term dips are noted.  In around 1/2 of the cases the 260 day (1 year) moving average has been regained but only against the NOK has this line actually stopped falling.

What all of this points to is the risk of an initial setback for the SEK to hand back a varying degree of it's recent advance. SEKGBP is actually at risk of dipping to new lows, but elsewhere the recent lows for the move are favoured to hold firm with scope for higher lows on most of the charts, setting up start of a renewed recovery phase over coming weeks.

SEK currently looks strongest on a multi-week view against the JPY, AUD, NZD & NOK.  See charts below.  In all four cases recent price action successfully regained the 260 day (1 year) moving average, ahead of the latest consolidation / correction.  It is against these four currencies where I see the strongest likelihood of a setback successfully leaving a higher low, followed by further SEK gains over coming weeks.

SEK/JPY                                             SEK/AUD                                             SEK/NZD                                    SEK/NOK




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