USD/SEK has been in a sliding mode since Tuesday, when the rate hit resistance at 9.7500. Overall, it appears that the pair is getting ready to complete a “Head and Shoulders” formation, which could happen if it dips below the 9.6000 zone, the pattern’s neckline. Up until that happens, we will stay sidelined and monitor the price action.
If indeed the bears decide to push the action below the 9.6000 zone, then we will turn our eyes to lower levels, the first one being the 9.5000 zone, marked as a support by the low of August 14th. If they are not willing to stop there, then we could see extensions towards the 9.4100 zone, where another break may open the path towards the 9.3100 area, near the low of July 18th.
Looking at our daily momentum studies, we see that the RSI turned down after it hit resistance slightly below 50, while the MACD, already negative, lies slightly below its trigger line. Both indicators detect negative momentum and support the notion for further declines.
On the upside, we would like to see a clear break above 9.7500 before we consider the H&S pattern to be invalid. Such a move would initially aim for the high of October 14th, at around 9.8600, the break of which could trigger more advances, perhaps aiming for the high of October 9th, at around 9.9650.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
78% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
