The USD/NOK pair went back and forth during the course of the session on Monday, slamming into the 8.00000 handle. This of course is a large, round, psychologically significant number, and will of course attract a little bit of resistance. However, as you can see on this chart I have a nice uptrend in effect, based upon the trend line. You have to keep in mind that the Norwegian krone is highly leveraged to the oil markets, and they haven’t exactly been bullish lately. With this, I believe the pullbacks continue to offer buying opportunities, and that the market should then head to the 8.42000 level. It will be choppy of course, but quite frankly this is a marketplace that has a nice strong trend pushing the action.
I believe that the oil markets are doomed, and quite frankly are going to continue to sell off every time they rally. With this, it makes sense of this pair goes higher, and that it’s only a matter of time before we break out to the upside. A pullback that show signs of support, I am a buyer, but I’m also a buyer on a break out above the 8.05000 level.
[CAD:FXAcademy CTA #73]Watch the oil markets
Make sure to pay attention to the oil markets, as Norway exports so much of that commodity. In fact, most traders will use the Norwegian krone as a proxy for crude oil. In fact, it’s very difficult to find trades based upon anything outside of the oil markets when it concerns the NOK. Because of this, it’s essentially the same thing as plain the oil markets as most traders know nothing about Norwegian economic policy for example.
Ultimately, I believe that this pair goes much higher, but I believe that the 8.42000 level continues to be the target for the short-term. That’s plenty of room for the move, and as a result I think that traders will continue to try to push to that direction. Expect a lot of back and forth volatility, this is more or less a longer-term trade.
