Today, ShortSelling will discuss the opportunities to buy or short sell the EUR/SEK currency pair, that's been moving downwards for a while.

ShortSelling also bring up some of the latest upcoming news connected with Euro and Swedish krona. This currency pair continues to trade in a downtrend as economic activity in the Eurozone continues to contract further.

Covid still a concern for both Sweden and EU

Coronavirus concerns continue to weigh on the economy, and the EU Markit Composite PMI came in at 47.5 last week, below the previous 49.1. Last Thursday, the European Central Bank had a monetary policy meeting, and policymakers left the current policy unchanged. President of the European Central Bank Christine Lagarde said there is no urgency on expanding stimulus, and the current situation would last until March 2022. Data wise, macroeconomic figures keep confirming that the biggest countries in the Eurozone are struggling to survive through the pandemic.

The ongoing uncertainty, together with the COVID-19 pandemic, could add another selling pressure for the EUR. In December, inflation in the Union held within negative levels, with the German annual CPI confirmed at -0.7% and the EU index at -0.3%. On the other side, Sweden's currency gained ground against all its major rivals last year, and a massive outperformance of the Swedish krona (SEK) continues. Sweden's Riksbank held firm in 2020 compared to many other major central banks, and this is one of the major reasons behind the rise of the Swedish krona. After raising its benchmark interest rate to 0.00% in late 2019, the Riksbank held that rate steady throughout the last year, making only incremental changes to its bank lending rate to try to stimulate the economy. Sweden also had a unique approach to the covid pandemic fight as policymakers continued economic activity mostly as “normal,” eschewing the draconian lockdown measures. This unique approach helped Sweden's labor market, the unemployment rate in Sweden remain steady, and the country avoided the worst of the labor market disruption seen in other developed economies. But what happens next? Nobody knows. Unless a big stability package comes to restaurants and hotels along with retail, we might soon see a lot more unemployment in Sweden. Ready for buying or shorting the Swedish krona? Check out eToro for Europe (review) or eToro USA (review).

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Technical analysis of EUR/SEK

The EUR/SEK  is losing its value, this currency pair is trading again below 10.10 level, and the risk of further declines is not over yet. With the trend still clearly pointing to the downside for EUR/SEK, there's a high probability that the krone's strength and EUR weakness will extend into the first quarter of 2021. One of the easiest ways to buy or short EUR/SEK is through a margin trading platform. Many brokers allow this type of trading, with margin trades allowing investors to “borrow” money from a broker to make a trade. It's important to remember that there may be a leverage factor, which could either increase your profits or your losses. It's not a good idea to hold a short position for long periods or to leave an open position with no stop-loss order.

The global political tensions also have a big influence on this pair, and the pair needs to fall below the 10.00 level to extend moves lower. I marked support and resistance levels – 10.20, 10.30, and 10.40 represents the current resistance level, 10.00 and 9.90 are the current support levels on this chart. If the price jumps above 10.20, it would probably reach the 10.30 level very soon; the next target could be located around 10.40. If the price falls below 10.00, that could be a very good opportunity for the short- term traders; short-term traders can put the stop loss at 10.015 and take profit at 9.950 or below.

Conclusion about the trading range for EUR/SEK

The EUR/SEK has weakened below 10.10 last trading week, the risk of further declines is not over yet, and the major trend is still bearish (downtrend). There's a high probability that the krone's strength and EUR weakness will extend into the first quarter of 2021.

The major reason behind the rise of the Swedish krona is that Sweden's Riksbank held interest rates steady throughout the last year, making only incremental changes to its bank lending rate to stimulate the economy. Sweden also had a unique approach to the covid pandemic fight as policymakers continued economic activity mostly as “normal,” eschewing the draconian lockdown measures. However, a risk factor for the Swedish krona include Per Jansson, a member of the Riksbank. He is opening up for negative interest rates again if in case he manage to get more on his side, the krona might decrease in value drastically against the Euro.

Next meetings for the Swedish centralbank

The next meetings from the Swedish Riksbank include Deputy Governor Anna Breman participating in SNS Board of Trustees and panel discussions about the past year at the 27th of January. The governor of the Riksbank, Stefan Ingves, will hold a hearing on financial stability on 2nd of February, 2021 that's open for the public according to Riksdagen. The Central Bank's Executive Board will meet on 3 February, while the General Council of the Riksbank will meet on 5 February 2021 at 13.00 (GMT +1). For the ECB, the next meeting will include the Governing Council of the ECB: non-monetary policy at their meeting in Frankfurt at the 3rd of February, 2021.

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