The USD/NOK pair initially tried to fall during the course of the session on Wednesday, but found enough support to turn things back around and test the 7.85 level. The reason I find this so interesting is that the area is that it is the top of what I perceive as an ascending triangle, and we are most certainly in an uptrend. So having said that, we have to look at what is the Norwegian krone, and that of course is crude oil. We all know that crude oil is suffering, and as a result it makes sense that the Norwegian krone would lose value.
Ultimately, I believe that this pair is going to the 8.0000 level, but of course will take some time. If we can get a close on the four hour chart above the 7.85 level, I would be a buyer at that point in time. After all, the US dollar is without a doubt one of the most preferred currencies around the world, and it’s very likely that the Norwegian krone will continue to suffer at the hands of petroleum sellers.
Commodity currencies in general are out-of-favor at the moment
Commodity currencies in general are out-of-favor at the moment, and this of course was not helped late in the day as the Royal Bank of New Zealand stated after an interest rate decision that they were very concerned about the state of the economy, that exports are down. With that being the case, it appears that commodity markets will continue to be soft as New Zealand is such a commodity laden economy.
Ultimately, I believe that this pair is one of those once you can buy every time he dips, but keep in mind that the spread is a little higher than you might be used to. However, the PIP value is much lower as well, so don’t bat an eye at 50 or 60 PIP spread. This is a longer-term trade anyway, and that’s exactly how you to trade some of these exotics.
