EUR/SEK has been appreciating since mid-June when the rate reversed from the senior channel. This long-term pattern was formed at the very beginning of 2017. By this Friday, the rate had returned back to the 23.60% Fibonacci retracement line at 10.47 which has worked as strong resistance this month. The upper boundary of the junior channel is likewise located there.
The pair’s current movement leads to suggest that a breakout of this resistance cluster is likely to occur, thus allowing the Euro to target another important resistance level at 10.48. This upward move should be supported by the 55-, 100– and 200-period SMAs both on the 1H and 4H time-frames.
A possible target for the following week is the monthly R1 at 10.60. Moreover, the upward tendency of the price demonstrates that the Euro might actually continue trading in line with the senior channel and thus re-test the 2018 high of 10.70.
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During the past few months, the European common currency has diminished its trading range against the Swedish Krone. The latest move within both boundaries of this triangle-like formation started on July 28. The rate surged 2.00% within two weeks and peaked at a two-month high of 10.45 last Friday.
If looking at the 1H chart, the Euro was testing the 200-hour SMA at 10.36 mid-Tuesday. Technical indicators suggest that some short-term correction north should occur within the following trading session or two, especially if this long-term moving average is strengthened by the 55-period (4H) SMA.
The rate should nevertheless regain its bearish momentum later in the week and target either the monthly PP and the weekly S1 at 10.32 or the senior channel circa 10.30.