This week we present one technical view: EUR/SEK – reversion to 200-day MA maintains bullish bias.

EURSEK

Strategy Summary – Look to buy dips for gains to 9.9740/9.9795. Place stop below 9.1580.

The sharp fall from the 12 February 9.6895 peak reached 9.0570 on 12 March before bulls returned to defend the 13/7 October 2014 prior reaction lows at 9.0570/55. The subsequent strong rebound has regained the 200-DMA, stabilising the wider structure, and the underlying up-trend is now expected to resume. This view is supported by the MACD study which has recently seen a bullish crossover and is now probing its 0 line.

Clearance of the 18 March 9.3615 high can spur further gains towards the 61.8% retracement of the 9.6895-9.0570 fall at 9.4480. Through here will open further targets at 9.4880 (18 February low) and 9.5810 (19 February high) ahead of a return to the 2014 peak (16 December) at 9.7295. Longer-term, scope is seen for a test of the 50% retracement of the March 2009 – August 2012 fall at 9.9795 (near the 21 May 2010 high at 9.9740).

It would take a breach of the 18 March 9.1580 low to derail the recovery, and potentially trigger a deeper setback towards support in 8.9920/8.9675 (50% of the March 2013 – December 2014 rise/15 May 2014 low) area.

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