- EUR/SEK touches a three-day high on Friday, albeit lacks follow-through.
- The formation of a multiple-top on the daily chart favours bearish traders.
- Repeated failures to find acceptance below the 11.80 level warrant caution.
The EUR/SEK pair edges higher for the third straight day on Friday and touches a three-day high level of 11.8978 during the Asian session, albeit lacks bullish conviction.
From a technical perspective, the recent repeated failures ahead of the 12.00 round figure constitute the formation of a bearish multiple-top pattern on the daily chart. The EUR/SEK pair, however, has been showing some resilience below a previous strong resistance breakpoint, now turned support around the 11.80 region, which should now act as a pivotal point.
Meanwhile, oscillators on the daily chart are still holding in the bullish territory and have again started gaining positive traction on the 4-hour chart. This further makes it prudent to wait for strong follow-through selling and acceptance below the 11.80 area before traders start positioning for any meaningful corrective decline from the all-time peak touched in August.
The EUR/SEK pair might then accelerate the downfall towards the 11.7500 horizontal zone en route to the 11.7050 area. This is followed by support near the 11.6600 level, which if broken decisively will suggest that spot prices have topped out in the near term and set the stage for a further depreciating move.
On the flip side, bulls need to wait for a convincing breakout through the multiple-top barrier near the 11.95 region before placing fresh bets. The EUR/SEK pair might then prolong its well-established uptrend from the July swing low, around the 11.40 area.
EUR/SEK 4-hour chart
Technical levels to watch
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