Since the last days of August, the Swedish krone has been gaining ground against the common currency. This led to a break of the medium-term upside support line, taken from the low of the 14th of June. Such a move could be seen as an invitation for more bears to jump in and drive EUR/SEK down. For now, we will stay bearish over the short-term outlook of this pair.
EUR/SEK is already showing its willingness to continue traveling lower, as it broke its key support level at 10.344, marked by the low of the 14th of August. This move may have opened the path towards the next potential area of support at 10.296, which held the rate from dropping lower on the 6th of August. If that support is not able to withstand the pressure from the bears, then the next level to watch is the 10.260 hurdle, marked by the low of the 1st of August.
Our oscillators are supporting this idea, as the RSI is getting closer to the 20 zone. The MACD is negative and, while a few hours ago was showing signs of bottoming, it now has dropped back below its trigger line.
On the other hand, a strong move back above the aforementioned upside line, could put the bears on hold, because a further acceleration of the rate and a close above the 10.426 zone could make them abandon the battle. More bulls could start joining in and potentially driving EUR/SEK towards the next good area of resistance at 10.509, which was the intra-day swing low of the 14th of September. A break above that, could open the way towards the 10.567 barrier, marked by the peak of the 14th of September.
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