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Friday, 21 December 2012

USDSEK Analysis

USDSEK has been very strong in the past few days but for many reasons I am Starting to get long the pair. The markets have been very unusual today with E-Mini's down 3.5% during asia to recover to only down 1.5%

E-mini S&P500 Futures, down 3.25% in 25 minutes. Thomson Reuters.
Normally stocks and USDSEK have an inverse relationship due to the Dollar and risk effect of SEK. These kind of flash crashes don't happen for no reason and I feel that we are due a major 7-10% correction in equities which would be very supportive of USDSEK.

USDSEK 4 Hour. Thomson Reuters
As shown in the chart above, USDSEK is in an area which has previoulsly acted as strong support and I fully expect it to do the same here. Combined with Stochastics showing short term oversoldness and the fundamental outlook of Equities I've Longed at 5.5050 with a near term target of 5.54

I would hope that this trade will take no more than 2-3 days at worse as 5.54 isn't far.
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