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Will the SEK put the Swedish OMX party at risk?

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Carlsquare
8 Nov 2022 | 1 min read
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European equities have performed relatively strongly since the local bottom at the end of September. German DAX index is up a little more than 13 per cent, while the Swedish OMXS30 is up close to 12 per cent. The chart below shows that OMXS30 is trying to break up above MA200. Momentum is positive and increasing, as visualized by MACD.

OMXS30 (in SEK), one-year daily chart

2022-11-08_CS1
Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

In the weekly five-year chart, one can see how the index is currently trading above the falling trendline. Momentum is negative but increasing. In case of continued strength, the next level on the upside is found around 2065-2085:

OMXS30 (in SEK), weekly five-year chart

2022-11-08_CS2
Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

However, SEK is strengthening against the USD and currently testing support. See the chart below. A stronger SEK is unfavourableble for Swedish companies, especially the big industrial sector, selling in the USD and EUR but having large portions of their costs and reporting in SEK. In OMXS30, Ericsson, Volvo and Boliden are names where the USD/SEK- ratio is an important factor for profitability. Thus, will a stronger SEK put the bull party in OMXS30 at risk?

USDSEK daily one-year chart

2022-11-08_CS3
Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

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

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This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future results.

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