I sold EURSEK at 8.7315 after prices completed a bearish Evening Star candlestick pattern at channel and 61.8% Fibonacci retracement resistance. I am expecting Risksbank to switch to a neutral policy stance after December’s rate cut while the ECB begins easing in 2013 as falling “PIIGS” bond yields mark normalization of monetary policy transmission. Prices have staged a rebound and are now testing the 50% Fibonacci retracement at 8.6498. I will look for this recovery to top out to add to the position. The stop-loss has been trailed to break-even. The initial objective is 8.5054.
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- Fibonacci retracement