Patterns: USD/SEK, EUR/NOK
|USD/SEK 1H Chart: Short-term decline expected
The USD/SEK exchange rate has been tended north since the beginning of August when it reversed from the senior channel near 8.75.
By the time of this analysis, the rate had reached the 9.25 mark, breached a medium-term channel and retraced from the upper boundary of this pattern.
The most common scenario for such a breakout would be a surge towards the upper channel line located circa 9.45. However, technical indicators suggest that this advance might not be immediate, as some downward pressure is likely to push the rate down to the 200-hour and 55-period (4H) SMAs at 9.10 or slightly lower within the following sessions.
It is expected that the bullish scenario eventually prevails in the market and thus allows the pair to reach the 9.45/50 area.
EUR/NOK 1H Chart: Pair shows signs of reversal
The most recent development of the EUR/NOK exchange rate is a breakout from the senior channel which occurred near 9.59 on August 16. This move has extended the pair's three-day gain to 1.65%.
As a result, the Euro reached the upper boundary of a ten-week ascending channel at 9.68. Even though the price still continues to edge higher today, technical indicators are starting to point to a possible change in sentiment.
It is likely that a reversal south occurs soon, as the current three-day surge cannot be sustainable for long. It is likely that the pair makes a U-turn near the channel line and the 23.60% Fibonacci retracement somewhere in the 9.70 area. A possible downside target for the following sessions is the 55– and 100-period (4H) SMAs and the monthly PP at 9.50.
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