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EUR: Virus issues continue

Even in a more risk-on climate, EUR/USD should struggle to stage a strong rebound for the time being, as worries about the eurozone’s contagion situation and lingering doubt about EU countries’ ability to speed up vaccinations should keep the euro’s upside restricted. This is spilling over into Sweden’s krona, which has been a big underperformer in the past two weeks and has a strong beta to EU-related sentiment. Should contagion fears in Europe escalate, EUR/SEK could test the 10.2549 200-day moving average resistance. Also, keep an eye on Riksbank Governor Stefan Ingves’ comments, as they may have an effect on SEK.