The downtrend formed in March completely lost its momentum and after a short period of consolidation, the rates pushed up. Likely the USD/SEK is now in the stage of the trend reversal which began from last week. Nevertheless, this may still change and the upward movement will be in fact a usual price correction, which always turns out to be quite powerful after reaching a peak or a minimum.
This week, the dollar strengthened as a safe asset due to fears of a second wave of the coronavirus pandemic. The number of cases is growing in countries where the quarantine has been softened, including China. At the same time, due to disappointing US unemployment reports that showed a weaker than expected recovery, the dollar was under pressure.
However, the economic situation in Sweden and in the EU is also not ideal. In particular, this week the unemployment report in Sweden showed an increase in unemployment for the third month in a row. The ECB meeting did not significantly affect the value of the Swedish Krona, and no events are expected next week that could strengthen the Krona. Therefore, in the current situation, we believe that the deals to BUY will be the most effective in the short term. Most technical analysis tools also indicate the efficiency of the deals to BUY.
