The USD/SEK is approaching critical resistance on the weekly chart as we approach the 8.0000 level. Like the EUR/USD as it approaches the 1.1700 level (critical support of 1.1639 Nov 2005 lows) a lot of these levels will hold or break dependent on the actions of the ECB in the coming weeks.

The USD/SEK 8.000 level (as seen below) has a confluence of the 61.8% Fibonacci retracement level from 2008 highs to 2011 lows. Also a 161.8% Fibonacci extension from 2012 highs to 2013 lows. This confluence (approx 8.0000) will be a major congestion level until after the ECB meeting January 22nd. I suspect a break or rejection of this level will take place following the ECB meeting.The ECB will influence the EUR/USD exchange rate which tends to be an inverse relationship to the USD/SEK.

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I have been long the USD/SEK exchange rate for the last several weeks.