© Dukascopy Bank SA
As soon as USD/DKK approached 5.54, it came under strong selling pressure that forced the currency pair to go all the way down to 5.42 within a month. However, given that the trading range has been narrowing during that period, the rate seems to have formed a falling wedge pattern.
Accordingly, there is an elevated probability that the down-trend resistance line, which has been guiding the price south since Feb 6, may be violated in the nearest future. This could ultimately bring the U.S. Dollar back to 5.54, although in such a case we should be wary of the resistance at 5.4508, which is represented by the long-term moving average and the weekly R1.
© Dukascopy Bank SA