EUR/SEK had its ups and downs over the last 20 years or so, setting a high at 11.4465 and a floor of 8.1186. The latest downfall stripped off 31% of the pair's value, and has now resulted in a partial recovery after 8.3253 sent it skyrocketing. A rising wedge pattern is, however, signaling bulls to watch out and it might be time some downward risks remind of themselves. A newly sketched unconfirmed channel up pattern does not gain our trust enough for us to shift into green-zone expectations, but gives some guidance for unanticipated rallies.
The weekly chart gives us more reason to believe that bullish momentum will not be sustained and that a dive is to come next. First of all, the pair has set an almost-perfect head and shoulders pattern, following a break outside of the trading range it had been bound by for several years. The shoulder is set at 9.6208 where the previous range boundary rests, but the pair is now approaching the neckline which clusters with the bottom boundary of the rising wedge – together providing very strong bearish potential, if broken around 9.4372. This cluster leads us to the next note – the pair is testing the very edge of the pitchfork which, along with a green cloud, neckline and wedge trend-line might cause a correction phase before weakness is gathered enough to dip beneath. When the zone is broken to the downside, risk will shift to 9.3151, the STARC band which also clusters with a Bollinger Band (not depicted in the chart), setting a strong target for a southward movement. Both CCI and ADX indicate a lack of trend and rest in the grey area.
The weekly chart gives us more reason to believe that bullish momentum will not be sustained and that a dive is to come next. First of all, the pair has set an almost-perfect head and shoulders pattern, following a break outside of the trading range it had been bound by for several years. The shoulder is set at 9.6208 where the previous range boundary rests, but the pair is now approaching the neckline which clusters with the bottom boundary of the rising wedge – together providing very strong bearish potential, if broken around 9.4372. This cluster leads us to the next note – the pair is testing the very edge of the pitchfork which, along with a green cloud, neckline and wedge trend-line might cause a correction phase before weakness is gathered enough to dip beneath. When the zone is broken to the downside, risk will shift to 9.3151, the STARC band which also clusters with a Bollinger Band (not depicted in the chart), setting a strong target for a southward movement. Both CCI and ADX indicate a lack of trend and rest in the grey area.