BUZZ-COMMENT-Time for the Swedish crown to catch its breath

Feb 25 (Reuters) - With a 3.5% February rally under its belt and significantly oversold readings showing up on the EUR/SEK charts, it might be time for the Swedish crown to give back some ground to the euro.

There have only been two daily pullbacks against the short-term EUR/SEK bear trend. One adjustment set in following a hammer candlestick on February 11 and the second rebound took hold during the Monday session.

Monday's price action recorded a bullish engulfing candlestick. Only modest in size but the reversal signal coupled with extreme oversold daily studies still warns of a potential EUR/SEK wind change.

Engulfing lines are a two-candle pattern where the second candle's real body (shaded area between the open and close) completely engulfs the previous session's real body. In a bear trend, the second candle would have a bullish real body; buying pressure has overwhelmed selling pressure.

Fibonacci retracement levels taken off the 11.5160-11.1190 February 3-21 fall provide pullback targets. A minimum correction level, 23.6%, is at 11.2127 and the key 50% retracement is at 11.3175.

The 10-day moving average line has defined the near-month-long bear trend and provides resistance today at 11.1975.

The fundamental backdrop still supports the SEK versus the euro and any technical reversal in EUR/SEK direction might just offer better entry levels for those looking to join the underlying trend.

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