By Dan Eduard – After making significant gains against both the U.S. Dollar and Euro in trading late last week, the Scandinavian Kroner dropped amid positive American economic news. After reaching a 2-day high of 7.0576 against the Dollar last Thursday, the Swedish Krona is currently trading just above the 7.1230 mark. The Norwegian Krone similarly decreased in value against the greenback. Trading as high as 5.722 against the Dollar last Thursday, NOK is now hovering around the $5.7900 level.
The reversal in fortunes for the Scandinavian Kroner is largely due to the overall impression among investors that the American economy is steadily improving. A string of reports released on Friday have caused the Dollar to improve against all of its major counterparts.
Traders may want to note some of the significant news events that may impact the U.S. economy in the next week. Chief among these are the statements coming out of the Federal Reserve this Wednesday. While it is not expected that American interest rates will change soon, any indication that the American economy is improving will likely mean bad news for the Kroner. That being said, if the statements from the Federal Reserve do not give investors a positive feeling about the U.S. economy, the Scandinavian currencies could see substantial profits.
Technical Analysis
– The chart below is the 1-day chart for the USD/SEK currency pair.
– The indicators used are the Stochastic Slow, RSI and Bollinger Bands.
– Point 1: The Stochastic Slow indicates a bearish cross and may enter a downward trend.
– Point 2: The RSI shows the currency pair approaching overbought territory line. If it should cross this line, a downward correction is likely to follow.
– Point 3: The price is currently floating at the upper end of the Bollinger Bands which indicates downward pressure is likely to occur.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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