The USD/NOK pair broke higher during the session on Tuesday, just as I suspected that it very well could have in yesterday’s column. However, you can see that the oil markets during the same day fell, so it makes sense that there is less demand for the Norwegian krone, which is very sensitive to the price of crude oil in general. Norway’s most significant exporter of course is crude oil, so that makes sense as the main catalyst.
Any pullback at this point in time will have me very interested in going long of this market, as I think that we are almost certain to hit the 6.30000 level again, which was the high that we had seen back in the month of February. With that being the case, I would be very interested in the 6.20000 level, as it looks to be a bit supportive now, and I think that is probably the perfect entry spot if we get that opportunity.
The correlation holds, and should continue to do so.
The oil markets to look a bit susceptible at the moment, although I don’t expect any type of major meltdown between now and Friday. Nonetheless, I expect to see pressure on the oil markets in general, so I still expect to see this market go higher between now and then. It’s difficult to imagine what the response will be in this currency pair on Friday with the nonfarm payroll numbers coming out, because I do not expect that it will be a massive correlation between the number and this pair directly. However, what happens in the oil markets will almost undoubtedly be inverse over here, so be aware of that.
I believe that this market will ultimately break out above the 6.30000 level, but will more than likely have to have some type of pullback in the process. You can see that there was a massive positive candle during the month of June from the 6.00000 level, and as a result I believe that that impulsive move is still having a massive effect on this market. I am will “buy only” of this market.
