BUZZ-COMMENT-False trend break sinks the EUR versus the SEK

Feb 5 (Reuters) - A false trend break and subsequent key day reversal on Monday sent EUR/SEK sharply lower on Tuesday and the back to back bear sessions could be a game changer for the cross.

A bearish key day reversal, higher high, lower low and close below the previous close, has greater significance when appearing within an established bull trend but Monday's signal could still negatively impact a mainly sideways EUR/SEK.

There have been other large bearish jolts within the November-February down-trend, but the euro recovered quickly from these and EUR/SEK has only moved lower within a shallow bearish bias.

Given the uncertainty surrounding global growth and international trade, the SEK could quickly come under pressure again but technically there might be scope for EUR/SEK to revisit the 11.2970 lows from October.

Tuesday's 11.3801 low provides initial support with a 76.4% Fibonacci level, taken off the 11.2450-11.7105 September-November bull run, coming in just below at 11.3549. A weekly trend support line, taken off the December 2023 11.000 low is also close by at 11.3533.

Swedish flash January inflation data is due for release on Thursday and expectations are for price rises to undercut the Riksbank's forecast. However, the central bank's cautious stance at the last policy meeting might prove to be valid if a trade war kicks off, igniting inflationary pressures.

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