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Euro/Krona Cross Rate Carving Out Inverse Head & Shoulders Base
Written by article default Tuesday, 05 October 2010 09:30
OVERVIEW – With no local data of note on the calendar, the regional currencies should continue to trade off of broader global macro fundamentals. The latest RBA and BOJ rate decisions were certainly more on the dovish side and highlighted ongoing concerns over the threat of a shaky global economy. This does not bode well for the Scandis, as the local currencies are very much tied to risk themes. Technically, we are already seeing evidence of a potential weakness, with the krona seen the most at risk over the coming days.
Eur/SekAlthough the overriding trend is still intensely bearish, the market looks to have finally found some form of a base by 9.09 and appears to be in the process of carving out a major inverse head & shoulders bottom. From here, look for additional upside back towards a measured move objective by 9.50 over the coming days. Ultimately, only back below 9.13 would delay and give reason for concern.
Eur/Nok Overall price action remains quite choppy with the market most recently stalling out ahead of the multi-day range lows by 7.80 and bouncing back into the mid-range. From here, look for additional upside to test the range highs by 8.20 over the coming sessions.
Usd/SekDaily studies are in the process of turning up from oversold, and the market could be looking to establish a material base by 6.68. Look for a daily close back above 6.80 to confirm bullish reversal prospects and open an acceleration back above 7.00 over the coming sessions.
Usd/Nok Although the overriding trend has been bearish, the market remains very well supported on a medium-term base ahead of 5.80 and we could now be seeing the formation of yet another base ahead of the mentioned barrier. Daily studies are in the process of turning up, and the risks from here are for some additional gains back above 6.00 over the coming sessions.
Gbp/NokThe market is content on some choppy consolidation for now and a break back above 9.40 or below 9.20 will be required to establish a clearer directional bias. Until then the best place to be is on the sidelines.
Nok/JpyRemains confined to a multi-day range broadly defined between 13.25 and 14.50. The market has most recently stalled out by the range highs, and as such, the preferred strategy is to look to sell in favor of a continuation of the prevailing range trade. Ultimately, a close back above 14.50 would be required to negate.
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