NOK/SEK could be heading lower

Clear triple divergence between price and stochastics (a powerful reversal sign) has stretched positioning against the 200-day moving average.

A failure of the Aug 2012 lows and 76.4% retracement of the 2013 to 2104 sell-off has also been seen, and on the weekly chart it looks as though we are going to see a sizeable bearish weekly reversal.

Looking at the oscillators, the MACD is below the signal line and stochastics have made a lower low. You can also see the stochastic on the weekly chart looks ominously poised to fall.

Traders might look to sell the pair around these levels, with a potential stop at 1.1230 (just above the May 30 high), for a potential move to 1.0865 to 1.0800.

Spot FX NOK/SEK chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.