By Dan Eduard – Over the last month and a half, USD/SEK has been stuck in a prolonged downward trend. The U.S. dollar has been bearish across the board, but against the SEK, it has seen particularly heavy losses. Since June 7th, the pair has tumbled an astounding 8000 pips. As we will see, technical data will indicate that an upward correction is finally set to take place.
We will be looking at the daily chart for USD/SEK, provided by ForexYard. The technical indicators we will analyze are the Bollinger Bands, Stochastic Slow and Relative Strength Index (RSI).
1. The pair is currently trading along the lower band, indicating that an upward correction is due to take place. Furthermore, the Bollinger Bands are beginning to widen, spreading further apart. This typically means that a price shift is likely to take place.
2. A cross in the Stochastic Slow is currently forming below the lower support line. This is typically seen as a clear indicator that a bullish correction is imminent.
3. Looking at the RSI, we can see that it is well below the lower support line. Traders can take this as a clear sign that upward movement is likely to take place, further supporting our original theory.
Forex Market Analysis provided by Forex Yard.
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