The USD/SEK pair had a very volatile session on Thursday, forming a very neutral candle. What I have noticed in this pair though is that the 8.60 level above is continuing to offer quite a bit of resistance. With this being the case, I think that we can close above there on a daily chart, the market should then continue to go higher, with the first target being the 8.65 handle, and then eventually the 9.00 level over the longer term.
The Swedish krona continues to struggle in general, and you can see that we have been very positive in favor of the US dollar against the Swedish krona since April. Because of this, this is a market that I think will eventually break out to the upside so I look at pullbacks as potential buying opportunities. The Swedish krona is considered to be a “riskier” currency, mainly due to its proximity to European markets and of course the higher interest rate that offers from the US dollar.
I would also be willing to suggest that perhaps we are trying to build some type of ascending triangle, so with that being the case I think it’s only a matter of time before we not only break out to the upside, but again, reach towards the 9.00 handle as the measuring of the ascending triangle would suggest. I do recognize that the spread on this pair is a little bit higher, but quite frankly if you keep in mind that the value of each tick is much smaller. On top of that, you have to keep in mind that the USD/SEK is actually part of the US Dollar Index, so in technical terms, it is actually a major pair. A lot of Forex traders avoid this pair though, and I think they do at their own peril. Quite frankly, it does tend to trend quite nicely over the longer term.
