OVERVIEW – We have been seeing an acceleration in broad based USD selling early Monday, but at this point it is too early to tell whether the moves are legitimate. It is no shocker that the broad USD selling has also resulted in an outperformance in the regional currencies, with only the South Korean Won faring better than the NOK and SEK. The Japan holiday has made for a very thin session of trade thus far, and we would not at all be surprised to see a fuller European session start to sell the Scandis on account of some overdone illiquid trade. Overall, our bias remains net Scandi bearish as technical studies warn of medium to longer-term topping. As such, we continue to recommend selling the regional currencies against both the USD and Euro on any form of a rally.  

Eur/Sek pullbacks should be well propped in the 10.15 area with the market in the process of carving a meaningful base on the daily chart. The market has been in the process of carving out a series of higher lows and higher highs and we look for a fresh higher low at current levels ahead of the next upside extension towards 10.60-70 further up. Back above 10.25 will however be required to get things going, while a break back below 10.10 is concerning. 

Eur/Nok has come back under pressure over the past several days with the market trading down to a 12+ month year low below 8.20. However, despite the weakness on the cross, we are not convinced of these moves and continue to see value at current levels with the market more likely to bounce from here rather than to continue to drop. Daily studies confirm with the RSI now dipping back into oversold territory. A break back above 8.25 is now required to accelerate gains. 

Usd/Sek our view is highly constructive at current levels and favors continued USD appreciation over the coming weeks.  We contend the market is attempting to carve out a major base rather than in the process of some bearish consolidation. The recent break back above 7.20 confirms bias and exposes 7.50-60 further up. Any setbacks are expected to be well supported ahead of 7.00.

Usd/Nok has retraced since triggering a major double bottom. However, our core bias is still highly constructive and we look for any dips to be well supported in the 5.65-70 area.  Look for a higher low to carve out ahead of the next upside extension beyond 5.90 over the coming days. 

Gbp/Nok recovery rally has pulled back since reaching 9.53 in the previous weeks, but our outlook remains constructive, and a higher low is now sought out above 9.00, ahead of the next upside extension beyond 9.53.

Nok/Jpy has been well confined to a very choppy range trade over the past several weeks, largely defined between 15.00 and 16.50. Pullbacks have once again been well supported in the 15.00 area ahead of the latest bounce back into the upper range. From here, we recommend continuing to play the range high-lows.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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