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Scandi Daily 07.22

Scandi Daily 07.22

2010-07-22 04:20:00
Joel Kruger, Technical Strategist
OVERVIEW – All remains quiet in the region with economic calendar empty leaving the local currencies to continue to trade off of the broader global macro fundamentals. For now, price action in Thursday trade should be heavily impacted by just how the European markets digest the latest comments from Fed Chair Bernanke, along with negative close in US equities. Clearly any additional strain on global equities should have a negative impact on the nordics, while resurgence in sentiment and renewed confidence should help to bolster the Scandis. Stay tuned…  
Eur/Sek As expected, we are finally starting see a bit of a bounce with the market oversold and in need of some corrective action. A bullish outside day last Thursday confirms constructive outlook and we are well positioned with a long already established. Look for some fresh upside over the coming sessions back towards initial resistance by 9.60-65. Long @ 9.3850 for an open objective; revised stop 9.3850.  
Eur/Nok The market continues to adhere to a rising bull channel since early June after being well supported ahead of 7.90 in recent trade, and we now look for some continued strength back towards 8.30 over the coming sessions. 
Usd/Sek Our initiated long position from the previous week had a little bit of pain before finally reversing sharply and back to our entry level into the close on Friday. With daily studies starting to turn up from oversold, and the market stalling out by some formidable longer-term support, we continue to hold the position and look for significant upside over the coming sessions. Look for the break back above 7.40 to confirm and accelerate towards 7.60-80, while only back under 7.25 negates. Long by 7.36 with stops placed by 7.24, in anticipation of a reversal back towards 7.80 at a minimum. 
Usd/Nok As we had written in Friday’s commentary, setbacks were very well supported by the 100-Day SMA, with the market unable to establish a close below the longer-term SMA and subsequently bouncing sharply back above 6.25 to keep the bullish structure intact. From here, we look for an acceleration of gains towards 6.40 and then 6.60 further up. Only a close back below the 100-Day at 6.18 would negate and give reason for pause.   
Gbp/Nok Has been in an impressive bull channel since mid-March, with the market rallying to the 9.80 area ahead of the latest minor pullback below 9.50. However, the market has once again adhered to the bull channel after bouncing back above 9.50 and we look for fresh upside beyond 9.80 over the coming sessions. 
Nok/Jpy Market confines to a 13.50-14.50 range since May, with the price currently locked somewhere in the middle of this range. Ultimately, the overriding trend still remains quite bearish, so any rallies towards 14.50 should be sold. 
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com 
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