Speculators of the USD/SEK have certainly seen plenty of sideways trading the past month, but choppy conditions have also allowed traders to use resistance levels in order to engage in selling. The bearish trend of the USD/SEK remains fully intact from a technical perspective. Yes, the choppy trading the past month has likely raised suspicions that a bullish reversal may develop, but support levels continue to look vulnerable.
Since late last week the USD/SEK has seen some buying emerge, but resistance near 8.80800 looks rather solid. The current price vicinity of the USD/SEK has essentially traversed between the 8.74200 and 8.79500 junctures this morning. After seeing a slight surge of bullish momentum for the USD/SEK short term the pair has consolidated and traders who are tempted to sell are likely targeting the 8.72000 mark as an important inflection point below.
The USD/SEK has been able to provide traders who are patient with solid opportunities to take advantage of downside momentum. While the past month of trading has provided challenging conditions the resistance level of 8.83000 has not been beaten higher. On the 18th and 19th of August the USD/SEK tested lower support near the 8.61000 level and traders who believe downside momentum will reestablish itself are likely targeting this area.
Trading in the USD/SEK can appear quick, but speculators must take into consideration that the moves within the forex pair are magnified because of the limited scope of its range which is actually quite tight. Trading the USD/SEK like all forex must be done with a carefully selected amount of leverage, so a position is not vulnerable to sudden fluctuations which can have a large effect on cash balances on accounts due to the change of value based on basis point movements.
The strong mid-term range of the USD/SEK remains bearish. Traders should consider pursuing selling positions based on the strong global risk appetite which remains in the marketplace. Sweden has certainly steered its own path regarding its management of the coronavirus. While the nation has been criticized it has also proven to be steadfast about wanting to protect its economy.
Sellers should consider entering positions of the USD/SEK between 8.73000 to 8.77000 and pursuing downside momentum which may have the ability to be demonstrated near term.
Swedish Krona Short Term Outlook:
Current Resistance: 8.80900
Current Support: 8.72000
High Target: 8.85000
Low Target: 8.66000
