OVERVIEW – Despite some impressive gains in currencies against the buck on Wednesday, with notable gains in both the Euro and Swissie to fresh 2009 highs, we retain our bearish outlook for the regional currencies with the view that both the NOK and SEK are in the process of carving out material tops against the Euro and USD respectively. In today’s technical section we highlight Usd/Nok, which in our opinion shows the formation of a major double bottom. While we can still expect to see some volatility in Thursday trade on the back of some Swedish trade data and Norwegian unemployment, traders should also be fully aware of the lightened US Thanksgiving holiday trade later in the day.

Eur/Sek pullbacks should be well propped ahead of 10.15 with the market in the process of carving a meaningful base on the daily chart. Look for the latest bullish price action to now open the next push back towards the recent range highs by 10.53. Only back under 10.15 concerns.

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.  A closer look at the daily chart reveals the potential formation of a major double bottom. 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 15.10-30 over the coming sessions. A close below the 100-Day SMA will reaffirm bearish outlook. 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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