During the European morning today, Sweden released its inflation numbers, which came out as expected, apart from the CPIF yoy figure that declined by a tenth of a percent from the forecasted +2.2%. But that was enough for investors to start dumping the krona, which led to EUR/SEK exploding and moving higher. The pair broke some key resistance levels, initially the 10.340 obstacle and then the 10.350 barrier, which held the rate from moving higher almost throughout the whole November. For now, we will continue aiming higher, and even if there will be a bit of retracement back down, we will class that as a correction.
A further push higher could drag EUR/SEK to test the 10.394 hurdle, which was the intraday swing low of the of the 31st of October. This is where the buying momentum could slow down for a bit and the rate may do a throwback before moving back up again. Let’s not forget that for now, the pair is trading above its short-term upside support line, drawn from the low of the 5th of December, and if EUR/SEK decides to retrace lower, that upside line could be a good area for the bulls to step in again and drive the pair higher for another test of the 10.394 hurdle. If this time that zone is not able to withstand the bull-pressure, a break of it may open the way towards the 10.435 barrier, marked by the high of the 26th of October.
Looking at our oscillators, the RSI and the MACD, both seem to be in support of the above-discussed idea. The RSI is well above 50 and looks like it’s aiming for the overbought territory around 80. The MACD is also not lagging behind, as it is now above the trigger line and points higher.
On the downside, in order to start examining lower levels again, the ones that were tested in the first days of December, we would need to see a drop below the previously-mentioned short-term upside support line and a break of the 10.305 support zone. This way we could look into the 10.278 level as the next potential area of support. If then, the bears still remain in control, we could see the 10.278 level getting broken, which could lead EUR/SEK towards the 10.246 obstacle.
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. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers 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 analyzes 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 analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2018 JFD Brokers Ltd.