EUR/SEK has advanced sharply. Economists at Danske Bank analyze the pair’s outlook. 

Short-term overbought, medium-term bullish case intact

We think the rally is overdone as it has pushed EUR/SEK to overbought territory vs. relative rates and normal correlations.

Although we see the latest move higher in EUR/SEK as overdone, we remain bearish on the SEK over the medium term on the back of relative monetary policy, gloomy global growth outlook globally and domestic headwinds from the housing market suggest.

Forecast: 11.50 (1M), 11.30 (3M), 11.40 (6M), 11.60 (12M)