Could the EUR/SEK drop again from its resistance at 10.70 to10.80?
The world's stock markets, led by New York and the S&P500 index, are still facing a downtrend. On Monday morning, the futures indicated a sharp decline in the DAX futures based on Gazprom's (in practice, probably Putin's) decision to shut down the Nordstream 1 gas pipeline "due to repair needs". Europe is facing an energy crisis this autumn. Consequently, inflation expectations and interest rates are still on the rise.
The world's stock markets, led by New York and the S&P500 index, are still facing a downtrend. On Monday morning, the futures indicated a sharp decline in the DAX futures based on Gazprom's (in practice, probably Putin's) decision to shut down the Nordstream 1 gas pipeline "due to repair needs". Europe is facing an energy crisis this autumn. Consequently, inflation expectations and interest rates are still on the rise.
The US indices, led by the Nasdaq and S&P500, have fallen more than the European indices over the past week. So, the stock market is currently trading on higher yield requirements and lower Price/Earnings ratios, which predominately hurt the valuation of growth companies.
US 10-year Treasury Bond (in %), a weekly five-year price chart
This time we choose a currency case, the EUR/SEK exchange rate. This is following the SEK not only weakening a lot against the USD but also against the EUR recently. Despite a very strong USD trend, we do not think it will be broken other than in the short term. This is due to continued turmoil in global equity markets (where the USD is a safe-haven currency). Furthermore, the USD exchange rate is driven by rising commodity demand (priced in USD).
The EUR/SEK story is different. Sweden has put itself in a precarious situation with nuclear power plants closed in the southern part of the country and rising electricity prices in this area. However, Germany’s energy balance is even more vulnerable than Sweden’s, with a high dependence on imported Russian gas that is now turned off. If this energy crisis were to affect German industry (which it most certainly will), it would primarily affect the Eurozone but also partly Sweden due to large trade exchanges, including deliveries of goods between our industrial companies.
EUR/SEK, a daily one-year price chart
Bull & Bear-Certificates
The EUR/SEK currency cross has approached a resistance level of around 10.70 to 10.80. Could this be the third time that EUR/SEK rebounds downwards from this level?
EUR/SEK, a weekly five-year price chart
The full name for abbreviations used in the previous text:
EMA 9: 9-day exponential moving average
Fibonacci: There are several Fibonacci lines used in technical analysis.
Fibonacci numbers are a sequence of numbers in which each successive number is
the sum of the two previous numbers.
MA20: 20-day moving average
MA50: 50-day moving average
MA100: 100-day moving average
MA200: 200-day moving average
MACD: Moving average convergence divergence
Risks
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