By Dan Eduard – EUR/SEK saw a massive spike of almost 1500 pips on Tuesday, following comments from Sweden’s central bank regarding future interest rate hikes. While the pair is still moving up, technical indicators are showing that a downward correction is likely to occur in the near future. Krona traders will want to pay close attention to the pair
We will be looking at the daily chart for EUR/SEK provided by Forexyard. The technical indicators being used are the Williams Percent Range, Relative Strength Index (RSI) and MACD.
1. The Williams Percent Range is currently right above the -20 level. This is typically seen as a sign that the pair is in overbought territory and may correct itself in the near future. Should the indicator continue to move up, the bigger the chance that a reversal will take place.
2. The Relative Strength Index has not yet approached overbought territory, but appears likely to approach that area shortly. Currently the RSI is right around the 60 level. If traders see the indicator go above 70, it can be taken as a sign that downward pressure exists for the pair.
3. Finally, the MACD has formed a bearish cross, indicating that a reversal is likely to take place in the near future. Traders will want to watch out for a sudden correction for this pair, as significant profits can be made when the downward breach occurs.
Forex Market Analysis provided by ForexYard.
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