FxNews—The American dollar has been in a bear market against the Swedish Krona since April 24 from the $11.04 mark. The downtrend eased after the bears broke below the $10.76 resistance and EMA 50, as shown in the daily chart below.
USD/SEK Technical Analysis Daily Chart
In a bullish effort, the U.S. dollar tested the broken resistance on May 17 and May 22, but the failure to surpass this key resistance led the downtrend to prevail again.
Interestingly, the USD/SEK daily chart above shows two bullish candlestick patterns, a doji and a hammer candlestick. These developments could be interpreted as the American currency consolidating some of its recent losses or showing the bullish traders’ endeavor to reverse the trend from a bear market to a bull market.
The technical indicators in the daily chart give mixed signals. The awesome oscillator value is -0.11, lingering below the signal line, with one green bar appearing today. The relative strength index (RSI) is below 50, showing a value of 43 in the description, and the stochastic oscillator approaches the 20 level, with the %K line value at 28.
These developments in the technical indicators in the daily chart suggest the market lacks momentum and is uncertain about the trend direction. Therefore, we zoomed into the USD/SEK 4-hour chart for a detailed analysis and found key levels and trading opportunities.
USD/SEK Technical Analysis 4-Hour Chart
The 4-hour chart above provides a detailed outlook of the currency pair’s price action and technical indicators.
The USD/SEK price is below EMA 50, the Ichimoku cloud, and the descending line. This development suggests the trend is bearish, aligning with our understanding of daily charts. The technical indicators also signal a continuation of the bear market.
The RSI value is 45, hovering below the middle line. The stochastic oscillator %K has turned downside with a value of 62, and the AO oscillator bars turned green, with a value decreased to 0.025, approaching the signal line.
These developments in the technical indicators in the 4-hour chart suggest the downtrend will likely resume.
USDSEK Forecast – Bearish Trend is Valid Below $10.76
From a technical standpoint, the primary trend is bearish as long as the USD/SEK price hovers below EMA 50 and the immediate resistance at $10.76.
Therefore, if the bears maintain their position below the key resistance level, the downtrend begun this week from $10.76 could target the 50% Fibonacci at $10.59, followed by April’s all-time low at $10.48, a deck backed by 61.8% Fibonacci.
The Bullish Scenario
On the flip side, if the USD/SEK price surges and crosses above the descending trendline at about $10.79, the consolidation phase begun on May 16 can expand to the 23.6% Fibonacci at $10.83. Notably, a surpass above $10.83 will signal a change in the trend direction from a bear market to a bull market. If this scenario comes into play, the buyers’ road to $10.90 will likely be paved.
USD/SEK Fundamental Factors – Swedish Jobless Rate Hits 8.9%
Bloomberg—Based on technical analysis, The USD/SEK is in a bear market. However, Sweden’s recent economic data shows that the jobless rate increased to 8.9% in April 2024, up from 7.5% the previous year. This growth in joblessness indicates that despite the Swedish economy going through a rough era, the increase in Krona’s value is mainly linked to the weak dollar.
In addition, the number of unemployed people in Sweden increased by 87,000 from 2023 to 513,000. The number of employed individuals slightly increased, rising by 3,000 to 5,227 million employed people.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
