USDSEK
Updated
USDSEK has been showing some nice support at some key zones. Though I'm in for a long at the monthly S1, if the trade works out I'm probably early so there should be another chance to enter - if you think USD has some overall strength still to show.
Reason for the expectation that there will be another entry - their CB will be on deck next week. They have widely telegraphed that they will tighten at this meeting - and that has been the main reason for SEK strength in the last few months. We should expect continued SEK strength into the meeting unless the USD side of the equation strengthens considerably.
However, looking beyond that, they have already said that they expect rates to stand pat for a considerable length of time after this raise - so unless they change this narrative, there should be a bounce for USDSEK, perhaps after a brief sell-off immediately after the announcement.
My stop could be a little too tight here - SEK likes a decent spike as it isn't as liquid as the main pairs - but the H1 price action does look promising - there's enough ammunition in the buyers to break the trendline so even if we reach new lows in the next week before the CB meeting, this is a decent sign buyers are stepping back in.
Of course, this trade relies on the idea that USD strength will remain going into the end of December/ 2020. I'm in that camp so I will happily take this trade - but of course, will always on the lookout for the right signs that USD weakness is around the corner (as is widely expected for 2020).
Reason for the expectation that there will be another entry - their CB will be on deck next week. They have widely telegraphed that they will tighten at this meeting - and that has been the main reason for SEK strength in the last few months. We should expect continued SEK strength into the meeting unless the USD side of the equation strengthens considerably.
However, looking beyond that, they have already said that they expect rates to stand pat for a considerable length of time after this raise - so unless they change this narrative, there should be a bounce for USDSEK, perhaps after a brief sell-off immediately after the announcement.
My stop could be a little too tight here - SEK likes a decent spike as it isn't as liquid as the main pairs - but the H1 price action does look promising - there's enough ammunition in the buyers to break the trendline so even if we reach new lows in the next week before the CB meeting, this is a decent sign buyers are stepping back in.
Of course, this trade relies on the idea that USD strength will remain going into the end of December/ 2020. I'm in that camp so I will happily take this trade - but of course, will always on the lookout for the right signs that USD weakness is around the corner (as is widely expected for 2020).
Trade closed: stop reached
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