Trading opportunities for currency pair: after the Brexit, the USD/SEK switched into a correctional phase. I reckon that it will continue until August and the rate will not surpass the 8.7451 maximum. On the road to the trend line (8.1097) the sellers meet two interim levels: 8.3191 and 8.2186. Any fall will be cancelled by a close of the daily candle above 8.5510. Above here we can place a protective stop.
In March I thought the dollar would strengthen to 8.50 before falling to 7.80. In fact, the USD/SEK fell by 4073 points to 7.8932 without any rebound.
USD/SEK weekly graph. Source: Tradingview
The USD/SEK rebounded from the level which was a 38.2% Fibonacci from an upwards movement from 6.3207 to 8.8845. The dollar revived to 8.3820 over the course of three weeks. After the Brexit referendum, the price rose to 8.7451. 51.9% of Brits voted to leave the EU.
The dollar/Swedish krona spent 14 months in channel 1. After the Brexit and people stopped panicking, the dollar lost 3320 points to 8.4131. After such a recoil we could see the fall continue.
Now we need to calculate the target levels. For this we will use the Fibonacci instrument. To define the horizontal support levels to calculate, we take the upward movement from the 7.8932 minimum to the 8.7451 maximum: 50.0% – 8.3191 and 61.8% – 8.2186. The sellers need to pass these levels to return the rate to the trend line at 8.1097. The 1c, 2c and 3c lines are set across the closing prices. The sellers need to break through the 3c as soon as possible. Look at the daily graph below to see my forecast.
USD/SEK daily graph. Source: Tradingview
A sharp fall could see the USD/SEK stay in a downward movement till August and not exceed the 8.7451 maximum. On the way to the trend line (8.1097) the sellers will meet two interim levels: 8.3191 and 8.2186. The US Fed will not put the rates up this summer, so the correction wil continue. I reckon the USD/SEK will fall to the trend line by the beginning of August. Any fall will be cancelled by a close of the daily candle above 8.5510. Above here we can place a protective stop.
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