Forex Strategy 02.22.2013: Stay Short EUR/SEK and GBP/USD
I sold EURSEK at 8.7315 expecting Risksbank to keep rates on hold while the ECB leans toward easing in 2013 as recession lingers. I added to the position at 8.6409 as a corrective rebound launched in early January faltered. An Inverted Hammer candlestick warns of another possible bounce from support at 8.4234, which I will treat as an opportunity to further grow the position. A stop-loss will be triggered on a close above 8.6557.
I also continue to hold short GBPUSD at 1.5662. Prices have now surpassed my second objective at 1.5296. A Hammer candlestick above support at 1.5131, the 100% Fibonacci expansion, warns that a corrective bounce may be ahead. I will continue to hold short, treating an advance from here as an opportunity to add to my position. A move back above 1.53 exposes the 23.6% Fib retracement at 1.5416. The stop-loss has been revised to be triggered on a close above the breakeven point (1.5662).
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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