- The US dollar initially fell against the Norwegian krone but has turned around to show signs of life again.
- We are currently testing the 11 NOK level, which is an area that previously has been important, so this is a pair that I’m paying close attention to.
- If we can break above the top of the candlestick, then I think it’s very likely that the US dollar will continue to see a lot of momentum entering this market, perhaps reaching the 11.25 level.
Norwegian Krone and Crude Oil
The US dollar strengthening against the Norwegian krone makes quite a bit of sense, and therefore I think you have to also pay attention to crude oil. Crude oil has been very noisy, but keep in mind that the US dollar is starting to overwhelm most currencies, despite other factors coming into the picture, not the least of which is crude oil, as the Norwegian economy is heavily influenced by the price of crude oil.
It looks very much like we are paying close attention to the bond market more than anything else, and perhaps even the possibility of whether or not there’s going to be a massive “risk off” type of situation, and therefore it’s likely that the greenback will destroy almost everything in its path, including the Norwegian currency.
If we do pull back from here, then I think there is plenty of support underneath, near the 50-Day EMA which is all the way down near the 10.7 NOK level, so we could see a fairly steep selloff, but right now it doesn’t look like that’s the case. After all, we have seen a lot of pressure in this pair, and I do think that eventually the selling pressure gets overwhelmed, and we go higher. This might be the case with most currencies, and of course the Norwegian krone is smaller than other currency such as the Euro, Pound, and Yen, suggesting that perhaps it will take an even bigger loss against the US dollar.
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