- The USD/NOK initially tried to rally during the course of the trading session on Thursday, but it seems like it’s hitting a potential significant resistance barrier against the Norwegian Krone.
- The 11.00 NOK level has been important previously, and it is possible that we are looking at a scenario where the US dollar needs a pullback in order to build up enough pressure against the Krone to really get moving.
- That being said, it’s also possible that we have to look at this through the prism of the oil market as well, as Norway is a major exporter of crude.
That being said, it’s probably worth noting that the correlation isn’t quite as strong as it once was between oil and the NOK, at least against the US dollar, as the United States produces over 12 million barrels a day. However, it all looks as if the market is going to continue to find buyers underneath, at least near the 10.80 level. The 50-Day EMA is hanging around that area as well, so I do think that this remains a “buy on the dip” attitude, as the market continues to favor the US dollar and what can be best described as a geopolitical mass at the moment.
Choppiness Ahead
Furthermore, interest rates in America are a lot higher than they typically are, so the interest rate differential helps the greenback, as for the first time since I can remember, Americans actually pay more. Whether or not your broker does is a completely different story of course.
Underneath, the 50-Day EMA will be my floor in the market, and if we can break above the top of the candlestick for the Thursday session, then I think it opens up a move to the 11.20 NOK level. The thing about this pair is that it does tend to be very choppy, so this is something that you need to treat as a longer-term trade regardless of how you get involved. For myself, I think that somewhere around the 10.87 level would be ideal for an entry, but we will have to wait and see whether or not we actually get that opportunity. It is what it is, in the US dollar is by far the big winner against most other currencies around the world right now.
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