The USD/NOK has produced a solid selling trend the past week. Support levels appear vulnerable and resistance is showing the ability to cause reversals when it is approached. As global risk appetite escalates traders cannot be faulted for pursuing this major forex pair which is positively positioned within the framework of Europe.
The USD/NOK has experienced strong selling and this morning has seen support of 9.33000 tested. The Norwegian Krone did face a turbulent month of trading in June, but its trend since late April has essentially produced solid short-selling technical outlook. Support near 9.20000 was tested in June before buying emerged and then tested resistance near 9.77000.
Risk sentiment in the global markets appears ready to increase short term. Concerns certainly exist regarding coronavirus and economic impact, but statistics show Norway appears to have the infection rate ‘under control’ and it continues to pursue an opening of its economy. Coupled with the growing belief the US Federal Reserve is pursuing a very proactive corporate welfare policy with what is politely called quantitative easing, selling the USD against the Norwegian Krone seems like a rather balanced forex trade.
The Norwegian government continues to say it will invest in infrastructure and another major oil discovery has been made recently within the nation’s sea. While the price of oil is certainly in peril and demand faces challenges over the mid-term, Norway does project an air of confidence and the NOK’s stature as a relatively secure speculative trade can be justified. Certainly, the USD/NOK will trade in both directions, but optimistic traders cannot be faulted for continuing to pursue selling positions of the USD/NOK.
If a trader can sell the USD/NOK with a limit order near price levels of 9.36000 to 9.40000 and aim for targets below near the 9.30000 for short term speculative positions, they may find a worthwhile trade waiting. For speculators who have the patience and stamina to withstand a potential test of resistance near the 9.50000 juncture a trade with a slightly longer outlook may be even more interesting if you believe the USD/NOK will continue to find selling momentum going into the weekend.
Norwegian Krone Short Term Outlook:
Current Resistance: 9.52000
Current Support: 9.30000
High Target: 9.60000
Low Target: 9.27000
