The USD/SEK rose during the session on Monday, as traders simply started to buy the US dollar in general. The greenback continues to be one of the favored currencies around the world, and the trend line that has been keeping this pair higher continues to support the US dollar. While Sweden isn’t necessarily the riskiest on the planet, the US dollar continues to beat up other currencies. The Swedes of course are tied to Europe, and as a result they suffer much like the Swiss do: by simple geography. After all, Sweden has much more in the way of dealings with the Europeans than they do the Americans, which is preferable at the moment. Just as the Canadians.
Nice uptrend, no reason to fight it
Over the last couple of sessions, we had seen the US dollar start to lose value. This was true around the world but quite frankly it was simply a pullback on the US Dollar Index that put pressure on the greenback itself. It was a simple pullback in an otherwise strong uptrend. Believe it or not, the USD/SEK pair is part of the US Dollar Index. Granted, it’s the smallest part, but it is part of it.
This chart looks a lot like the US Dollar Index chart, insomuch as we have broken above the range from Thursday which was where we started to see support come back into play. With this, I believe that this pair goes back to the 80.89 level over the course of the next three or four sessions, and I would be a buyer right here. I would also buy short-term pullbacks and show signs of support, as I believe that the buyers will be looking for value.
As long as we remain above the trend line that I have drawn on the chart, I don’t see any reason to be short of this market. Even then, I think it would be very choppy on the way down so therefore I would be a bit hesitant to short.
