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Eur/Sek Carving Out Fresh Higher Low Ahead of Next Upside Extension
Written by article default Wednesday, 03 August 2011 08:18
Eur/SekThe market recovery out from 8.70 remains intact despite the latest minor pullback and we look for a fresh higher low around 9.00 ahead of the next upside extension towards the 9.30-50 area further up. Weekly studies are looking even more constructive potentially with the formation of a major base. Ultimately, only a sustained break back below 9.00 would give reason for concern.
Usd/SekThe market looks to be in the process of a major structural shift, with the latest break back above the 6.40 area confirming a fresh higher low by 6.15 and exposing eventual gains towards 7.00 over the coming days. In the interim, any setbacks are now expected to be well supported above 6.20 on a daily close basis. The market has also not traded above the 200-Day SMA since August 2010 and a sustained break back above 6.50 where the longer-term SMA currently comes in will help to reaffirm bias and strengthen constructive outlook.
Usd/Nok The latest successful defense down by 5.30 and subsequent break back above the 100-Day SMA reaffirms our constructive outlook for the pair and a fresh upside extension is now projected over the coming days back above the 200-Day SMA by 5.65 and towards the 5.85-90 area further up. This market has also not traded above the 200-Day SMA since 2010 and the push back above the longer-term SMA will strengthen the recovery outlook. Only below 5.30 negates and gives reason for pause, while dips towards the level should be bought.
Eur/NokThe cross has taken out some major support in the 7.70 area, breaking to fresh yearly and multi-month lows and potentially opening the door for a bearish continuation pattern and fresh downside extension. From here, the risks are for deeper setbacks towards 7.50, while only back above 8.00 would alleviate downside pressures. In the interim, we remain sidelined and will look to see how the cross responds to the fresh lows.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com