By Greg Holden – Which currency would you claim as the strongest in Europe these past three months? Only forex traders familiar with the variety of instruments available in Europe would think to guess Sweden’s krona (SEK). It’s not that the SEK is the strongest in the region, but that it has potentially outpaced most others in its bullishness, and is no doubt a contender for summer-time champion of value gained.
This Scandinavian currency has, in fact, gained 7.75% against the USD since early June, and 4% versus the euro. The krona and British pound appear to be in a close race for most ground gained this summer. And that’s not all…
Sweden’s economy is growing; and faster than many expected. Second quarter GDP was posted at 3.7%, year-on-year. Sweden’s central bank expects annual growth for 2010 to be 3.8%, and 3.6% for 2011; even though the government offered a less optimistic forecast with 3.3% in 2010, and 3.8% in 2011. Lastly, over 80% of Swedish businesses reported better-than-expected earnings. Compared to a similar figure of roughly 65% for Germany, and Sweden’s recent growth, put into that perspective, suddenly appears more favorable than some of Europe’s other major economies.
Now the major question is whether Sweden can continue such growth. The Riksbank was one of the first major European economies to raise interest rates following the recent financial crisis and recession. But some analysts worry that it may have acted too soon. Whatever the outcome of such monetary measures, the first round of results appears to be in: Sweden 1, market pessimists 0.
Technical Analysis
EUR/SEK Fails to Breach Resistance Level – Looks to Resume Bearishness
• The chart below is the EUR/SEK 4-hour chart provided by ForexYard.
• For the past week the pair has rebounded from its recent low of 9.3335, and is currently trading around the 9.3950 level.
• The Fibonacci Retracement lines show that the pair tested the 23.6% line for several times, yet failed to breach it.
• The Slow Stochastic has recently completed a bearish cross, suggesting that a bearish move could be expected.
• The MACD has completed a bearish cross as well, further indicating that a down-trend might take place soon.
• The pair has potential to drop towards the 0% support level, which is located around the 9.3500 level.
EUR/SEK – 4-Hour Chart
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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