scandi daily

OVERVIEW – We are not all that convinced with the rebound in risk appetite on Thursday as of yet, as the regional currencies sit somewhere in the middle of the pack, despite the higher equity futures. This should be somewhat concerning as the nordics are generally inclined to outperform when risk appetite improves and equity futures are higher. As such, we take the divergence as a sign that risk appetite is not all that strong and could be exposed to some risk aversion into the latter stages of the day. We continue to look for opportunities to be short the regionals with both the NOK and SEK showing plenty of room to depreciate against the USD over the medium-term. Recent comments from FinMin Anders Borg have helped to prop the krona somewhat after raising the outlook for Swedish economic growth.

Eur/Sek pullbacks should be well propped in the 10.05-10 area with the market in the process of carving a meaningful base on the daily chart. The market has been in the process of carving out a series of higher lows and higher highs and we look for a fresh higher low at current levels ahead of the next upside extension towards 10.60-70 further up. A close back above 10.25 on Wednesday should get things going, while only below 10.10 is concerning. 

Eur/Nok had come back under pressure over the past several days with the market trading down to a 12+ month year low below 8.20. However, despite the weakness on the cross, we were not convinced of these moves and continued  to see value at current levels with the market more likely to bounce rather than to continue to drop. The latest break back above 8.22 confirms our bullish bias with the trigger of a double bottom that now should accelerate gains towards 8.30 over the coming sessions.

Usd/Sek our view is highly constructive at current levels and favors continued USD appreciation over the coming weeks.  We contend the market is attempting to carve out a major base rather than in the process of some bearish consolidation. Any setbacks are expected to be well supported ahead of 7.00, with the latest break back above 7.18 confirming bias and likely to accelerate gains towards 7.35.

Usd/Nok has retraced since triggering a major double bottom. However, our core bias is still highly constructive and we look for any dips to be well supported in the 5.60 area.  Look for a higher low to carve out ahead of the next upside extension beyond 5.90 over the coming sessions. 

Gbp/Nok outlook remains constructive, and a higher low is now sought out above 9.00, ahead of the next upside extension beyond 9.53. Recent price action helps to confirm bias.

Nok/Jpy has been well confined to a very choppy range trade over the past several weeks, largely defined between 15.00 and 16.50. Rallies have once again been well capped in the 16.50 area ahead of the latest retreat back towards the range lows. From here, we recommend continuing to play the range high-lows.
 

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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