USD/SEK traded lower on Wednesday, after it hit resistance at 9.1545. Overall though, the rate stays within the sideways range, between 9.0150 and 9.1830, that’s been in place since November 23rd. Therefore, we will maintain a neutral stance with regards to the short-term outlook.
In order to start examining the bearish case, we would like to see a clear dip below 9.0150, the lower bound of the range. This will confirm a forthcoming lower low and may initially target the 8.9420 area, marked by the low of November 22nd, and the inside swing high of November 17th. If the bears are not willing to stop there, then a break lower could carry larger bearish implications, perhaps paving the way towards the 8.8380 territory, defined as a support by the lows of November 17th and 18th.
Turning gaze to our short-term oscillators, we see that the RSI turned down and just touched its toe below its 50 line, while the MACD, although positive, has just crossed below its trigger line. The RSI suggests that the pair has started gaining downside speed, but according to the MACD, it is still early to arrive to that conclusion. That’s why we prefer to wait for a drop below the 9.0150 zone before we get more confident on the downside.
Alternatively, the outlook could turn bullish upon a break above 9.1830, the upper side of the range. This would confirm a forthcoming higher high and may allow advances towards the 9.2810 territory, marked by the high of July 10th, 2020. Another break, above 9.2810, could encourage extensions towards the high of July 3rd, 2020, at around 9.3400.
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