USD/SEK Reached an 18 Year High Amid Coronavirus Crisis
- The Swedish decided not to join the Banking Union
- USD/SEK managed to break the 9.30 level with a bullish movement
- Herd immunity strategy is applied by the Swedish government to fight the pandemic
Monthly Time Frame:
The Greenback resumed its climbing against the Swedish Krona by gaining more than 12%.
A monthly resistance was breached by the USD/SEK and managed to close above it. A bullish bias was built after this break with a possible upward movement in the coming weeks.
By plotting the RSI, there is a hidden divergence between the price and the values of RSI. The price is showing higher lows while the RSI values are displaying lower lows.
If the price managed to stay above the 9.30 mark, a bullish sentiment would be established. However, if the USD/SEK close down below this level, the price might face selling pressure from bears.
4-Hr Time Frame:
On the 4hr time frame, the pair is rallying upward with a correction defined by the red trendline.
Since the beginning of March, this appreciation of Dollar vs Swedish Krona has broken out the trendline and is preparing to move upward to continue its main direction.
The price is above the 100 Moving Average, which indicates that the bulls are still stronger than the bears.
If the pair moves to the upside in the coming days, the 10.43 mark will probably be reached. On the other hand, if there is a close under the 100-moving average, it is most likely that the price will drop to change its main direction.
As same as Britain and South Korea, the Swedish government implemented the herd immunity strategy in hope to battle the COVID-19 spread.
Since this strategy was revealed, the Swedish Krona started to depreciate against the US dollar, and a slow economy emerged.
“In major parts of Sweden, around Stockholm, we have reached a plateau [in new cases] and we’re already seeing the effect of herd immunity, and in a few weeks’ time, we’ll see even more of the effects of that. And in the rest of the country, the situation is stable,”
Dr Anders Tegnell
Dr Anders Tegnell, the Chief epidemiologist at Sweden’s Public Health Agency, told CNBC Tuesday.
Another major event waiting to affect the Swedish Krona currency is whether on not Sweden will participate in the banking union.
What is obvious now, is that the Greenback is still more potent vs the Swedish Korona, unless a piece of major news affects this bullish movement.