USDSEK peaked at 9.3325, extremely close to a major extension target at 9.3335. In the process a diamond top has been formed. I can assure those of you that cannot quite see the formation that on a 4 hour chart it is clear. Typically when these patterns are triggered, which this one has been on the push under 8.9990, they lead to substantial losses. If USDSEK does follow through with more losses this would fit in with general USD weakness which implies increased global liquidity and a likely return to risk, i.e higher equity markets. The fact that this pattern has formed so close to a major extension target just makes it more potent. Losses could potentially extend down to the 7.3800 region. I would suggest selling on pullbacks with a stop above today's high at 9.2360.
I appreciate that the Swedish economy is exposed to the baltic states via the Swedish banking system, but then which banking system isn't exposed to regions or elements that weaken their respsective balance sheets . USDSEK is technically easy to read for me that is why I have chosen it. Ultimately this one is driven by the technicals.
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