EUR/SEK traded somewhat lower today, but the slide stayed limited near the 200-EMA on the 4-hour chart, slightly above the lower bound of a descending triangle that’s been containing the price action since March 23rd. In theory, such triangles are considered bearish, but bearing in mind that, in reality, we saw such patterns being exited to the upside, we will hold a neutral stance for now and wait for the rate to break out, in either direction.
A break of the triangle’s lower end, which coincides with the 10.850 zone, would confirm a forthcoming lower low and may encourage the bears to push towards the 10.700 territory, fractionally above the inside swing highs of January 31st and February 3rd, as well as near the low of March 11th. Another break below 10.700 could extend the slide towards the low of March 9th, at around 10.630.
Turning attention to our short-term momentum studies, we see that the RSI runs below 50, while the MACD lies below both its zero and trigger lines. Both indicators detect downside speed, but the RSI has just ticked up, which supports our view to wait for a dip below 10.850 before getting confident on larger bearish extensions.
On the upside, we would like to see a decisive break above 11.020, before we start examining whether the bulls have stolen the bears’ weapons. Such a move may confirm the break of the triangle’s upper side and may initially pave the way towards the high of March 30th, at 11.110, where another break may carry more bullish implications, perhaps setting the stage for the peak of March 23rd, at around 11.200.
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