Investing.com – The euro is benefiting from bullish momentum in the mean time, in response to Financial institution of America Securities, and this seems to be more likely to proceed.

In August, the U.S. greenback selloff was undoubtedly the point of interest for the international trade market, BoA analysts stated, in a word dated Aug. 26, whereas the broad euro rally could have been underappreciated by traders. 

Nonetheless, month up to now, the euro’s nominal efficient trade charge (NEER) has appreciated by 1.1% on a trade-weighted foundation, rating on the eightieth percentile versus the previous 20 years, the financial institution added. 

The euro’s power is not only about spot bilaterally breaking out, the financial institution stated, as throughout non-USD G10 currencies, EUR could have probably the most near-term bullish momentum.

“Over the previous month, 1m skew (threat reversal over atm vol) rose by 12% for EUR/USD calls, by far the best throughout all USD/G10 pairs,” BoA stated.

With this in thoughts, and given the momentum for the euro, the financial institution recommends a bullish view on the cross this week.

“EUR/SEK stands out as an interesting candidate to us because the pair has returned -3% over the previous month, rating at third percentile over the previous decade,” the financial institution stated. “The EUR/SEK spot transfer has been in opposite to the bullish EUR choices movement and is dislocated vs 2y EU-SK charge differential.” 

The SEK rally is stretched, BoA added, and, in our view, was largely pushed by present brief SEK positioning unwind and speculators treating SEK as a “high- beta” proxy for the EUR amid this month’s threat restoration. 

“With EUR/SEK spot having fallen now to trendline assist and 200d SMA, the extent has turn out to be sufficiently enticing to tactically fade the month-to-date EUR/SEK transfer.”

At 06:15 ET (10:15 GMT), EUR/SEK traded 0.1% decrease at 11.3905.