USD/SEK, USD/NOK Recovery Suggests Underlying Bullish Outlook
NORDIC FX, NOK, SEK WEEKLY OUTLOOK
- USDSEK, USDNOK recovering after false downside breakout
- Interchange resistance may result in short-term consolidation
- expect external risks to cause higher-than-usual volatility next
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In mid-March, both USD/SEK and USD/NOK broke through key upward-sloping support lines, but they appear to be recovering fairly quickly, with each reclaiming 2.00 and 1.60 percent, respectively. This could indicate a bullish outlook for each pair. Therefore, any small contractions may be a blip in an otherwise broad upward trajectory.
USD/SEK – Daily Chart
After breaking through the January 2019 rising support, USD/SEK stopped right at the 9.2273 support and traded right on the edge of the floor before crashing through it and reversing to the upside after 9.1018 held. The pair is edging cautiously higher but appears to have recently shied away from a key psychological barrier at 9.3110. Trading above this roof and making it a new support will be a major step for the pair and may precede a bullish jump.
Given the fundamental outlook this week, there may be higher-than-usual volatility in USD/SEK (and USD/NOJ), but it is unlikely to reverse the dominant uptrend. The long wick on the March 28 signals a hope for the pair to climb higher, but the lack of follow-through showed that perhaps investors were not ready to close above 9.3310.
USD/NOK – Daily Chart
After breaking through below the lower-bound of the price channel, USD/NOK jumped over 1 percent in a single day and re-entered the range. The long-wicks indicate a desire to reach higher, however, resolve ultimately remained weak. Lacking determination, the pair gapped lower and is now struggling to re-enter the lower lip of the 8.5956-8.6323 range (blue lines). Despite the setback, the trajectory appears to still be bullish.
SWEDISH KRONA, NORWEGIAN KRONE TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.