USD/SEK: A Risky Currency - 20 July 2016

The Swedish krona has been getting sold off for quite some time now, as it is considered to be a “risky currency.” After all, the US dollar continues to gain strength due to the fact of the safe haven status that it enjoys, and of course the Swedes are very much exposed to the European Union situation. With that being the case, it makes sense that the US dollar continues to strengthen, and a break above the 8.62 level looks as if it is a sign that we are going to continue going higher given enough time.

I would also suggest that we have been seen “higher lows”, and that of course is a bullish sign as well. Once we break out above here, it should be rather difficult to deny the fact that we are going to continue to go higher. The 8.75 level above looks to be like the next major target, so having said that it’s likely that the buyers will pile on a break out to the upside.

Bullish trend

This market looks as if it is going to pull back from time to time, but that should be a nice buying opportunity. I think that the US dollar will continue to be favored in general, mainly because of what’s going on in the European Union. This has a bit of a “knock on effect” of what goes on in the USD/SEK pair, as I mentioned previously, the Swedes are part of the European Union. This of course will affect trade, and of course the economy of Sweden itself.

Ultimately, this is a market that should continue to find buyers every time it pulls back, even if we don’t breakout right now. After all, it looks as if there is a significant amount of support at the 8.55 level, and below there at the 8.50 level. Don’t let the large numbers and gaps between support and resistance fool you, PIP value is much less in this pair, so quite frankly you have to look at it more or less from a longer-term point of view. At this point, it certainly looks as if the buyers are in control.

USDSEK

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.