The beginning of September saw a slight bullish trend emerge for the USD/NOK, but the past week has seen a reversal lower develop.
The USD/NOK has experienced a strong bearish trend since mid-March. This downward technical trajectory within the forex pair has been steady and seen incremental moves without a great deal of volatility. However, in late August and early September after testing support levels that had not been consistently traded since January, the USD/NOK did see some bullish momentum develop. The forex pair essentially went from a value of 8.66000 to 9.13000 in late August until the 9th of September.
Since reaching this high watermark the USD/NOK has resumed its bearish trend in plain sight. The short term price action for the forex pair should be intriguing for speculators because there is a substantial amount of room for additional downward momentum to develop.
Global risk appetite has been rather inconsistent the past two weeks and this has had an effect on the USD/NOK. However, the past week has seen more optimism creep into equity indices worldwide and the forex pair has certainly recovered its bearish trend after seeing risk-averse trading likely help cause the early September buying of the USD/NOK.
Interestingly the US Federal Reserve is conducting a monetary policy meeting today and tomorrow. Traders should not be surprised to learn in the next two days that the US central bank will remain dovish and accommodative to make sure the US and global economy remain as healthy as possible. Meaning the USD is likely not going to see any major surprises from this central bank meeting and that forex markets will likely remain calm. The strong trend of the USD/NOK has been a steady bearish progression and early September’s brief bullish movement upwards certainly appears to have been short-lived. Certainly, other reversals will take place within the USD/NOK, but traders may want to continue to look for selling opportunities.
Speculators can definitely look for reversals higher within the USD/NOK, but risk-reward scenarios from a technical viewpoint seem to favor selling the forex pair. Traders cannot be faulted for looking for targets lower and believe that current support levels will prove vulnerable short term. Selling within the current price vicinity may prove worthwhile.
Norwegian Krone Short Term Outlook:
Current Resistance: 9.02300
Current Support: 8.96000
High Target: 9.26000
Low Target: 8.90000