The USD/SEK has continued to mount an impressive bearish trend even as critics of Swedish policies remain vocal.
The USD/SEK bearish trend is noteworthy for a variety of reasons. The Swedish Krona is testing support levels which essentially have not seen these sustained values since May of 2018. Technical traders who are skeptical of that sentence simply need to take a look at a five-year chart to see the evidence.
So while world health organizations and a variety of governments criticize Sweden’s approach to coronavirus, the Swedish Krona has proven strong. The selling of the USD/SEK continues to display a powerful and incremental trend as support levels are busted downward.
Support near the 8.64000 juncture has proven somewhat strong. This level has been tested twice in the past few weeks and has produced slight reversals upwards, but if the bearish momentum of the USD/SEK continues to sustain itself, speculators cannot be blamed for believing this level will eventually break too.
Yes, the USD/SEK has provided short term reversals and traders who want to look for upside action can look for small gains using limit orders if they want to test their patience with buying positions near the 8.67500 to 8.68500 band and seek small basis points movements higher. However, risk rewards scenarios continue to exhibit clear bearish momentum for the USD/SEK. Traders will need to be patient and know when to cash in profits. The USD/SEK has not traded with a landslide force downwards, the selling has been polite and without too much exuberance, which actually indicates the trend is potentially not finished yet.
Interestingly, economic reports and analysis for Sweden tends to encompass a wide notion of opinion depending on the writer and publisher. Some analysts say Sweden’s economy has suffered more or just as much as its Nordic neighbors which imposed far stricter coronavirus mandates on its citizens.
However, other publications with different opinions indicate Sweden’s economy is stronger fundamentally and its core business and banking institutions are doing relatively well and will outshine the results of their neighboring countries. Meaning, that readers need to contemplate who is writing the analysis and what are the goals of the article. Speculative traders who use technical data need to highlight the importance of simply looking at the trend of the USD/SEK, which is significant and cannot be argued as the value of the Swedish Krona proves robust.
Selling the USD/SEK and pursing its bearish trend remains the logical decision for this forex pair. Speculators need to be patient and not overtrade, proper risk management and pursuit of the downward momentum of the USD/SEK needs to be pursued carefully.
Swedish Krona Short Term Outlook:
Current Resistance: 8.74000
Current Support: 8.64000
High Target: 8.79000
Low Target: 8.59000