USDSEK rallied to a new 17-year high of 9.6980, starting from a low of 9.2985 on July 18. But sellers would not have it, and drew the price back below 9.6858, which was the previous 17-year high back in May. Despite bullish signals from the 50-, 100-day simple moving averages (SMAs), as they are heading up, and the Bollinger bands indicating high volatility, traders should be aware that a possible pullback is on the table.
The momentum signals, although bullish, suggest some pausing in positive directional momentum as the MACD has begun to turn flat above the red trigger line, whereas the RSI is in overbought areas and heading down to the uptrend line. The ADX is indicating a strong trend is in place but warns of a turn in the up move.
If the struggle north fades, price could see a correction to the support of 9.6125 of May 29, before testing 9.6030, which is the 23.6% Fibo retracement of the move up from 9.2985 to the new high of 9.6980. With further weakness in the pair, the middle Bollinger band currently at 9.5650 could be a hindrance on the way to see 9.5440, which is the 38.2% Fibo. A continued move down could bring the 9.4970 support barrier into range, which is the intersection of the 50-day SMA with the 50.0% Fibo.
To the upside, a jump and close above the high of 9.6980 could draw attention to the resistance level of 9.7950 back from August 2002.
Overall, the very short-term indicates a bullish bias, but momentum indicators warn that the move up may not have the muscle to unfold. For the bias to turn neutral, a close below the 9.4145 swing low would need to happen.
