By Greg Holden – It seems last week’s rise in Norwegian interest rates had the expected effect of raising the value of the NOK in the short run. However, cautionary statements about decreased growth resulting from a strong Kroner helped push the currency back down against the USD. The peak price levels experienced by the Scandinavian currencies against the greenback have fallen off this week, with most returning to levels unseen since September.
The sudden rise in risk aversion has pushed many investors back into the safety of the Dollar, with the Scandinavian Kroner experiencing a minor setback as a result. Norway appears on track to raise its interest rates steadily in the coming months, which lends weight to the notion that the NOK may rise steadily through to mid-2010.
Investors are still less certain about the Swedish Kroner (SEK), but a return to risk appetite could help boost the SEK to last week’s peak levels in no time. Denmark may still be under pressure to adhere to EU legal and monetary standards, but the pressure does not seem to be affecting its currency value and the DKK is largely following suit with the other currencies of the northern region.
Technical Analysis
– The chart below is the 4-Hour chart for the USD/SEK currency pair from ForexYard.
– The indicators used are the Bollinger Bands, the MACD/OsMA, and the Williams Percent Range.
– Point 1: The price is currently sitting near the upper border of the Bollinger Bands which indicates that there may be moderate downward pressure.
– Point 2: There appear to be a number of bearish crosses on the MACD which signals an impending downward move.
– Point 3: The Williams Percent Range has peaked at the 0 marker and has turned bearish, this means that there may actually be a strong level of downward pressure.
– Traders should expect a strong bearish correction from the current price level.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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