– The regional currencies proved to be exceptional performers in Wednesday trade, despite a late broad based USD
surge, with the NOK standing out as the top performing major currency on the day, aided by a snap in a two-day oil
losing streak. Meanwhile, the SEK also performed quite well after Riksbank Governor Ingves said that Europe’s credit crisis hadn’t caused any big difficulties in the Swedish financial sector. Looking ahead, it will be interesting to see where the USD heads on Thursday, and the direction of the buck on a broader scale, will most likely determine the fate of the Scandis. A stronger USD and break to fresh 2010 lows in the Euro
, will likely force some heavy selling in the region, while a resurgence in risk appetite and demand for currencies, will keep the NOK and SEK at the top of the board.
An interim base and 2010 low looks to be in place just ahead of 9.50, with the market in the process of unwinding from oversold levels. Longer-term technicals show room for plenty of additional corrective gains, and the latest break back above 9.89 helps to confirm recovery structure and open the door for a push above 10.00. .
A very well defined bear channel dating back to mid-2009 looks to have finally been violated, with the market rallying sharply back above 8.00 and suggesting that a key low has been set down by 7.67, in favor of additional gains over the medium-term back towards the 8.40-50 area. We would recommend looking for opportunities to buy on dips.
The market continues to extend gains to fresh 2010 highs, with the price rallying just over 8.00 thus far before stalling out. For now, there is some risk for a pullback to allow for short-term studies to unwind, but any setbacks are expected to be well supported ahead of 7.40, in favor of the next upside extension beyond 8.00 and towards 8.20 further up.
The market continues to extend gains to fresh 2010 highs, with a test of next key barriers by 6.70 seen over the coming sessions. For now, there is some risk for a pullback to allow for short-term studies to unwind, but any setbacks are expected to be well supported ahead of 6.20, in favor of the next upside extension beyond 6.70 and towards 7.00 further up.
Rallies have stalled out by critical multi-week resistance in the 9.50 area, and from here it is difficult to offer and clear directional bias. A clear break and close above 9.50 will be required to force a more significant shift in the structure, while failure to do so will suggest more range trade ahead and a pullback back towards the 9.00 handle.
Had been well confined to a very choppy range trade over the past several months, largely defined between 14.00 and 16.50. However, the lower end of this range has now been broken, with the cross dropping to trade below 14.00. This now opens the door for a retest of the key multi-year lows from early 2009 by 12.00.
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