USD/SEK Daily Chart.
I’m going to make an assumption that shorts have been leaning on USD/SEK in recent weeks as the pair had a false breakout in August above 8.8000. The false breakout formed the “head” of the head-and-shoulder pattern. But what USD/SEK bears may have been thinking is that the stocks would continue higher towards all-time highs and send the USD lower across the board.
With stocks looking weak, the risk (now) may be for a squeeze higher in the USD, and this could risk “negating” the setup and squeezing shorts. A move back above the 8.6650 level could squeeze the pair back toward the 8.8000+ level again.