The Swedish Krona continues to make support levels appear vulnerable. The USD/SEK is in the midst of a bearish trend which has produced better value for the Swedish Krona for a solid duration. Trading is never a one-way avenue, but it would be hard to argue against the trend the Swedish Krona has produced during the coronavirus pandemic since the middle of March.
Sweden has famously kept its economy open during the onslaught of the virus. Health officials worldwide have argued the government of Sweden was wrong not to enforce stricter coronavirus health mandates and has essentially put their population at risk. However, we are looking at the economy and the USD/SEK forex pair within this writing endeavor. While medical experts debate the merits of closure, it must be said many banking analysts who cover Sweden appear to believe the nation’s domestic corporations are facing fewer challenges via their credit and liquidity.
The value for the USD/SEK has been bearish and a five-day trading chart shows the trend seemingly continues to develop. Support levels near the 9.0000 may prove to be tough psychologically, but they could be overwhelmed by the current amount of selling within the USD/SEK and continue to seek further downside. The recent month of trading within the USD/SEK has seen value near the 9.47600 juncture steadily progress downward to its current support levels.
Sweden certainly has not found a cure for coronavirus and the methods its government has decreed remain an argumentative subject, but the decision not to enforce closures has certainly seemed to help its domestic banking industry remain healthier and not fear an incoming wave of sudden bankruptcies. The economy of Sweden and its neighbor Denmark have many things in common. Denmark did enforce closures because of coronavirus with strict rules, some analysts point out Sweden’s economic data is still similar to Denmark’s and suggest a closure in Sweden would have saved lives and its economy would still face similar challenges.
However, perception accounts for trading sentiment in large measures in the global landscape and its influence cannot be forgotten. Rightly or wrongly, Sweden’s perceived economic environment enjoys positive sentiment and the outlook for the USD/SEK appears to be bearish which means speculators may want to follow the downward trend until it runs out of steam.
Selling the USD against the SEK may look technically like there is not much downside potential, but by using secure stop-loss limit orders up above, speculators may logically presume there is profit still to be made pursuing the forex pair’s downward momentum.
Swedish Krona Short Term Outlook:
Current Resistance: 9.10000
Current Support: 9.01000
High Target: 9.15000
Low Target: 8.99000
