Target 1.0450, entry 1.07, stop 1.08
We like going tactically short NOK/SEK. For a cross that is traditionally mean
reverting, NOK/SEK looks very stretched from an RSI perspective (chart 1).
NOK positioning also looks extensive after the recent move (chart 2) while SEK
positioning is short. From a macro perspective, this morning’s Norway CPI was
weaker than anticipated, partly as a result of the recent appreciation in the
krone, while market expectations for Sweden CPIF and CPI tomorrow are to
the downside of Riksbank forecasts.