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SEK: Feb 2024 Low In EURSEK Remains Initial Support

SEK
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Initial support in EURSEK remains the Feb 22nd 2024 low at 11.1385, after the cross failed to sustain a move below this level the prior two sessions. This morning’s European equity market volatility has had a relatively small impact on the krona, with rate differentials seemingly driving the downside in EURSEK and NOKSEK. 

  • Clearance of the Feb 2024 low in EURSEK would expose clustered support at 11.0030 (December 2023 low) and the psychological 11.000 handle. Technical conditions remain unambiguously bearish, but the cross remains in oversold territory on a 14-day RSI basis.
  • Last week, Danske Bank changed their tactical view on EURSEK from bearish to neutral, “reflecting the fact that it is back in line with, even slightly below, short-term fair value”.
  • Meanwhile SocGen note that a break of multi-year lows in NOKSEK and EURSEK “could open the door to a broad-based SEK rally”. They suggest “GBP seems most attractive short side of that trade”.
  • SEB and Danske suggest month-end rebalancing needs will be SEK negative for Swedish asset managers in February. Danske also expect similar SEK negative rebalancing needs for foreign asset managers. 

 

 

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Initial support in EURSEK remains the Feb 22nd 2024 low at 11.1385, after the cross failed to sustain a move below this level the prior two sessions. This morning’s European equity market volatility has had a relatively small impact on the krona, with rate differentials seemingly driving the downside in EURSEK and NOKSEK. 

  • Clearance of the Feb 2024 low in EURSEK would expose clustered support at 11.0030 (December 2023 low) and the psychological 11.000 handle. Technical conditions remain unambiguously bearish, but the cross remains in oversold territory on a 14-day RSI basis.
  • Last week, Danske Bank changed their tactical view on EURSEK from bearish to neutral, “reflecting the fact that it is back in line with, even slightly below, short-term fair value”.
  • Meanwhile SocGen note that a break of multi-year lows in NOKSEK and EURSEK “could open the door to a broad-based SEK rally”. They suggest “GBP seems most attractive short side of that trade”.
  • SEB and Danske suggest month-end rebalancing needs will be SEK negative for Swedish asset managers in February. Danske also expect similar SEK negative rebalancing needs for foreign asset managers.