The USD/NOK pair fell during the course of the day on Tuesday, but found support in the form of the gap that we started the week out with on Monday. We ended up forming a hammer, and that of course is a very positive sign. As you can see on the chart, we are climbing up a nice uptrend line, much like the USD/CAD pair. That’s interesting, because one of the biggest fundamental drivers of the Norwegian krone is the value of oil. In other words, the US dollar is climbing against the petro currencies, and as a result it could mean more trouble for the oil markets as well. It really doesn’t matter though, there are times when we can completely decouple the typical correlations, as we have seen over the last couple of weeks.
I believe that the 6.20000 level above needs to be broken in order to be comfortable going long, but I certainly wouldn’t short this market now. If you can handle volatility, perhaps buying the US dollar against the Norwegian krone is the way to go even at this level.
Nice trend, massive support below.
You really can’t ask for a more clear-cut trend then you have on this chart. On top of that, there is an obvious cluster below and the uptrend line of course is pretty significant. As long as we do not break below that uptrend line, I just don’t see the ability to sell this pair. With that, I’m looking for this market to go to the 6.30000 level given enough time, but it’s probably going to take a couple of weeks to get there. In the meantime, I think that pullbacks will continue to be buying opportunities, just as we’ve seen recently.
Ultimately, I do think that we go above the 6.30000 level, but that’s a longer-term call. In the meantime, I believe that the US dollar strengthens overall, and against the Norwegian krone it isn’t going to be any different, as the US dollar remains king at the moment.
