USDSEK finds buyers at key support level
US Dollar/Swedish Krona (USDSEK) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDSEK ended Wednesday at 8.7977 gaining 51 pips (0.06%). Trading up to 295 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (USDSEK as at Sep 16, 2020):
Wednesday's trading range has been 593 pips (0.67%), that's below the last trading month's daily average range of 827 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDSEK. Prices continued to consolidate within a tight trading range between 8.7398 and 8.8230 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on August 27th, USDSEK actually lost -1.21% on the following trading day.
After trading down to 8.7637 earlier during the day, USD/SEK bounced off the key technical support level at 8.7922 (S1). The failure to close below the support might increase that levels importance as support going forward. After spiking up to 8.8230 during the day, the forex pair found resistance at the 50-day moving average at 8.8038.
While the currency is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the close-by swing low at 8.7398 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish High-Wave Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/SEK. Out of 35 times, USDSEK closed lower 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after five trading days, showing a win rate of 57.14% with an average market move of -0.18%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more