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USDSEK, USDNOK Reach 17-Year Highs as Recession Fears Rise

USDSEK, USDNOK Reach 17-Year Highs as Recession Fears Rise

2019-08-20 03:30:00
Dimitri Zabelin, Junior Currency Analyst
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NORDIC FX, NOK, SEK WEEKLY OUTLOOK

  • USDSEK and USDSEK may continue to climb beyond 17-year high
  • Growing recession concerns has been boosting anti-risk US Dollar
  • Strong underlying bullish bias likely to continue pushing pair higher

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USDSEK Technical Analysis

USDSEK has not only resumed its previous 20-month uptrend but is now re-testing 17-year highs as growing recessionary fears are boosting demand for liquidity and driving the US Dollar higher at the expense of the cycle-sensitive Swedish Krona.

The pair may have also found a new support zone – previously congestive area – between 9.5323-9.5767. The fact that the pair bounced back – as opposed to capitulating and breaking lower like it did in May – reinforces the notion of a strong underlying bullish bias. Looking ahead, USDSEK will likely continue to climb higher against the backdrop of investors seeking liquidity above riskier counterparts.

USDSEK Recovery Suggests Bullish Spike Ahead

Chart Showing USDSEK

USDSEK chart created using TradingView

Zooming out to a monthly chart shows USDSEK reaching 17-year highs while it continues to climb along a 20-month upward-sloping channel. The next significant landmark may be at the 10.00 level which is less than a three percent climb away for the pair. If the prevailing trend holds, USDSEK may reach that point before year-end.

How Much Higher Will USDSEK Go?

Chart Showing USDSEK

USDSEK chart created using TradingView

USDNOK Technical Analysis

Since deviating from its 17-month uptrend, USDNOK has spectacularly recovered and is once again re-testing 17-year highs above the previously-broken upward-sloping support channel. In the coming week the pair will likely continue to rise against the backdrop of growing recessionary fears, though if it falls USDNOK may find soft support around 8.950

Looking at a monthly chart shows how strong USDNOK is now relative to where it was a decade ago. The pair is over 20 percent higher than it was at the peak of the financial crisis. If another downturn occurs, the potential upside momentum for the USDNOK could be significant.

USDNOK Significantly Above Levels During 2008 Financial Crash

Chart Showing USDNOK

USDNOK chart created using TradingView

SWEDISH KRONA, NORWEGIAN KRONE TRADING RESOURCES

--- 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.

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