EUR/SEK traded higher on Friday, after hitting support at 10.410. That said, today, the rate traded in a quieter manner, staying slightly above the 10.450 zone, but well below the downside resistance line taken from the high of May 10, and well below the prior upside support line drawn from the low of Apr. 20.
In our view, this leaves the door open for the bears to jump back into the action and push the rate back down.
They may decide to take charge from near the 10.500 area, which provided resistance on June 1 and 2, and perhaps aim for another test near the 10.410 zone, which was hit on Friday, but also on May 17.
A break below that barrier will confirm a forthcoming lower low and could carry larger bearish implications, perhaps paving the way towards the 10.330 territory, defined as a support by the lows of May 4 and 5.
Taking a look at our short-term oscillators, we see that the RSI lies flat, fractionally below its 50 line, while the MACD, although negative, runs above its trigger line and points up.
Both indicators detect slowing downside speed, which means that some further consolidation, or even recovery, could be possible, perhaps until the 10.500 zone, which we already mentioned.
On the upside, we would like to see the recovery extending above both the aforementioned diagonal lines, as well as above the 10.555 territory. In our view, this could signal that the bulls have gained full control and that there are decent chances for more advances.
The next stop could be at 10.605, a resistance marked by the high of May 26, the break of which could aim for the high of May 12, at 10.638. If they don’t stop there, then we may see them climbing towards the high of May 10, at 10.677.