EUR/SEK is near a key level and if it breaks we expect far more upside in the Euro...

The key to where we go next is risk sentiment The SEK had a major rally on the USD as the market sees a dovish tilt coming from the Fed. This triggered a broad-based USD sell-off with high BETA currencies such as the SEK rallying strongly this also spilled over in SEK strength against other majors such as the EUR. We have since seen some upside in the EUR but expect more on a break above resistance.

We have NFP tomorrow in the US and unless we get a big miss we expect the market to re-evaluate its view of a possible 50 bps cut in September and 100 bps of cuts by year-end which we think will lead to a SEK sell-off against both the USD and EUR. We have also included the chart of USD/SEK below which is a very similar technical set up and of course also a buy on an upside breakout.

Using the 20-Day Moving Average in Strong Trends

In terms of strong trends, we view the 20-day moving average as a key level that can be used to time entry or in terms of setting stops – In strong downtrends, the 20-day MA will often provide resistance to rallies, and in uptrends will provide support. Below we are looking for a break of the 20-day MA to time a long entry.

Technical Analysis

The key levels of support and resistance to look out for are below.