By Greg Holden – Following the release of Sweden’s recessionary data, the Swedish Krona (SEK) took a sharp dive against its primary counterparts. The data revealed that Sweden actually slipped back into recession during the fourth quarter of 2009.
A 0.6% decline in fourth quarter GDP put selling pressure on the Swedish Krona in this week’s trading. Expectations were for a 0.3% rise in GDP. As a result, the SEK now trades at the 7.1845 level against the USD, and the 9.7870 level versus the EUR.
The Norwegian Krone (NOK) has also been unable to hold its recent gains made against the Dollar and Euro. Paring gains this week, the NOK has recently entered a small downturn due to a downward price movement in Crude Oil.
The Norwegian Finance Ministry also published its decision to grant further flexibility in rulings on the ban of investment companies, helping more investment firms stay in positive standing before being decommissioned by government regulators.
Technical Analysis
– The chart below is the 4-hour USD/NOK chart by ForexYard.
– The indicators used are the Stochastic (slow) and the Williams Percent Range.
– This pair is currently forming a “Pennant” on the chart. This happens when a solid upward movement is halted by a narrowing range, as shown below.
– Typically, when a Pennant formation reaches the narrowest point, represented by the number 1 on the chart below, a continuation of the previous trend will likely continue. This means the pair may continue to range-trade towards Point 1, and then continue with its previous uptrend.
– Point 2: Since the price is currently at the lower border of the consolidation trend (Pennant formation), there is a bullish cross on the Stochastic (slow) which indicates an upward move should take place in the nearest future, and you can see on the chart that this is already taking place.
– Point 3: The Williams Percent Range shows that the price touched the over-sold mark and then bounced off and is currently heading up. This only highlights a level of bullish momentum that is already building in the price of this pair.
USD/NOK 4-Hour Chart
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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