OVERVIEW – The regional currencies have rebounded quite nicely thus far on Wednesday despite the softer batch of inflation data out of Sweden and GDP from Norway in the previous day. The resurgence in demand for higher yielding currencies along with a very well bid commodity market has also helped to keep the Scandis well bid on the day, with the NOK and SEK standing out as some of the top performers. Looking ahead, Swedish consumer confidence and Norwegian unemployment data will be the key releases to watch on Wednesday. Traders should also expect to see some lighter trading volumes after today as the US gets ready for the Thanksgiving holiday.

Eur/Nok despite the latest setbacks, we still view the overall price action as constructive. Look for the price to be well supported ahead of 8.30, in favor of a bullish resumption back above key short-term resistance at 8.56 over the coming days. Ultimately, only below 8.24 negates.

Usd/Sek our view is still constructive at current levels despite the latest setbacks and favors 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 7.10 confirms bias and exposes 7.40-50 further up. Any setbacks are expected to be well supported ahead of 6.75, while back above 7.20 accelerates. 

Usd/Nok even with the latest pullbacks, we still retain a constructive outlook for the pair with the market looking to carve out a major double bottom on the daily chart.  We do not anticipate a retest of the recent 5.50 lows and instead favor a bounce at current levels back towards neckline resistance at 5.85, a break of which will trigger the double bottom formation.

Gbp/Nok recovery rally has pulled back since reaching 9.53 in the previous week, but our outlook remains constructive, and a higher low is now sought out above 9.00, ideally by 9.23, ahead of the next upside extension beyond 9.53.

Nok/Jpy as had be warned, the market was well overextended above 16.50 and the price has since retreated back into the well defined range. Deeper setbacks are now seen towards 15.50 over the coming sessions.  Rallies are expected to be well capped ahead of 16.00.
 

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