Technical Analysis – GBPSEK erases bearish rally; could post further gains in short term
Posted on May 16, 2018 at 1:08 pm GMTMelina Deltas, XM Investment Research Desk
GBPSEK has recorded a stunning bullish rally over the previous two trading days and is set to complete another positive session. After the rebound on the seven-month low of 11.6200, the price challenged an intraday high near the 11.8060 resistance level. The technical indicators in the short-term are confirming the upside momentum on price action.
The RSI is currently increasing positive momentum towards its neutral threshold of 50, while the %K line of stochastic oscillator posted a bullish cross with the %D line in the oversold area, suggesting further gains. However, the price is being capped by the 20- and 40-simple moving averages (SMAs) acting as significant resistance levels.
Should the pair extend gains, resistance should be met by the 20-day SMA near 11.8786. A significant leg above this key level could send prices towards the 12.1495 resistance high, identified on May 2.
On the flip side, if the pair bounces down, immediate support could be met at the 11.6200 support. Steeper decreases, though, could drive prices south towards the 11.4870, breaking the longer-timeframe ascending trend line.
In the bigger picture, the price is bullish as long as it has been holding above the uptrend line, since August 2017.
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