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CURRENCY ANALYSIS

SWEDISH KRONE LONG-TERM TECHNICAL OUTLOOK

The Swedish Kronor has been contained within a long-term bearish channel which originates back to the 1993 low and subsequent lower top in 1998.  There are several points of contact on both the bottom and the top of the channel.  The most recent test of the base of the channel came between March & May 2015, from where a bounce has occurred.  This has been accompanied by an oversold buy signal from MACD, but with the recent indicator low being deeper than the previous indicator high, the longer-term bias remains bearish.  Scope exists for a further multi-month recovery phase, but we see the risk of a lower top being left by support-turned-resistance from 2001 / 2011, which on average against nine other major currencies is 5-7% above the current value of the SEK.  Thereafter, a resumption of the long-term depreciation of the Swedish currency may commence.

SEK CURRENCY INDEX (VS MAJORS) MONTHLY LINE CHART

currency analysis long term USD

Steve Jarvis