USD/SEK (US DOLLAR/SWEDISH KRONA)
Currency traders should pay attention to this pair in the next few weeks. Though not a widely traded crossrate, USD/SEK can offer great opportunity if dollar strength continues. I like to look at volatility on daily charts and when I see low volatility combined with beautiful chart patterns I start following them for possible breakouts. USD/SEK has one of those nice chart patterns giving us bullish signal both on the daily and weekly scale. On the weekly scale which is the first chart on this post we can see an inverted head and shoulder pattern forming in the past one year with the neckline at 7.02 levels. A breakout above 7.02 will confirm the inverted H&S pattern and this will be extremely bullish for US dollar versus Swedish Krona.
On the daily chart USD/SEK formed an ascending triangle for the past 2 months. It has a horizontal resistance at 7.02 which is also the neckline of the inverted H&S pattern. We are definitely close to a breakout given the extreme low volatility. You can check my previous copper analysis to visualize what can follow after these type of low volatility periods (http://techcharts.wordpress.com/2012/01/05/copper/) I would suggest waiting for the breakout to take place in order to have confirmation. This chart should be on your watch list.
