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I looked at long NOK/SEK trades on October 17 at SEK1.0917, with a view to take profits at SEK1.1148. I aimed to place a stop loss on the trade at SEK1.084. However, with NOK/SEK the pair moving to the SEK1.1000 area, stops could be moved to SEK1.0905 – just below the 61.8% retracement of the recent rally and approaching breakeven.
I continue to hold a long bias, but would have even more conviction on a close above SEK1.1024 – the 38.2% retracement of the SEK1.1309 to SEK1.0847 sell-off.
I suggested short EUR/USD trades at $1.2714 yesterday and, with spot currently trading at $1.2645, the idea is working in the right direction for the pair.
Technically, we saw a bearish outside day reversal yesterday, suggesting the bears have taken control from the bulls, while the daily chart suggests we could be seeing the fifth wave of a pattern that started in May. I would be looking for a move through the recent low of $1.2500 to materialise in the medium term. Stops could be moved to $1.2790 – just above the 61.8% retracement of the recent sell-off from $1.2840.
A nice turn lower in stochastic momentum is adding to my conviction here.