The USD/NOK is trading near the 10.78950 ratio as of this writing, after trading at a low of nearly 10.65200 on Tuesday. A low of nearly 10.46650 was touched last Thursday, which challenged values previously seen around the 10th of May. The USD/NOK is correlating to the broad Forex market, and after touching a high near the 11.29620 ratio on the 31st of May, has provided speculators with a rather solid bearish trend until last Thursday’s depths were hit.
The USD/NOK reacted with a swift amount of price velocity upwards after the European Central Bank not only raised interest rates but also sounded alarm bells regarding inflation. While the Norwegian Krone is not directly tied to the ECB, the currency definitely reacts to the gyrations of the central bank based on behavioral sentiment and outlook. The notion the ECB is going to remain in a hawkish stance regarding interest rates has been also pronounced this week via its banking summit held in Portugal.
This morning’s trading in the USD/NOK has remained incrementally higher and is approaching last Friday’s highs, which may become a target point for speculative buyers who are looking for large overly ambitious moves. However, traders of the USD/NOK should pay attention to the upcoming Gross Domestic Product results from the U.S., which will be released in a few hours. If the growth numbers from the U.S. come in higher than anticipated, this could set off an additional speculative buying surge of the USD/NOK.
Resistance near the 10.83000 Level should be Given Consideration
The past week of trading has provided speculators with a rather large range to trade and wager on in the USD/NOK. The levels of 10.65000 to 10.90000 should be monitored over the near-term and depending on the outcome of the U.S growth numbers, volatility should be expected – particularly if there is a strong surprise to the upside. Having said that, if the GDP statistics come in weaker than forecast this could set off selling momentum in the USD/NOK.
- The USD/NOK continues to provide traders with the opportunity to wager on a currency pair that mirrors the major Forex movers like the EUR/USD.
- It is unlikely that the USD/NOK’s rather tight range will disappear today, because even if the U.S. produces strong growth numbers today in a surprising manner, buying momentum may have already been partially baked into the value of the USD/NOK.
- The momentum upward in an incremental fashion over the past two weeks has been on the expectation the U.S. Fed is going to become aggressive again regarding its interest rate policy in July.
Norwegian Krone Short-Term Outlook:
Current Resistance: 10.79500
Current Support: 10.75100
High Target: 10.95700
Low Target: 10.61800
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