While the USD has gotten stronger against many other major currencies globally, the Norwegian krone stands outside the box and is a clear outlier. The USD/NOK has been traversing lower and bearish momentum has gotten stronger since the end of September. After reaching a high of nearly 9.10600 on the 20th of August, the USD/NOK has displayed a rather sincere downward slope.
Intriguingly, the direction of USD/NOK illustrates the power of a unified technical and fundamental trading result. Fundamentally, the USD/NOK has been moving in a bearish direction because Norway’s central bank has been hawkish regarding its interest rate policy pronouncements. Also, strong global energy prices have certainly created a foundation of strength for the Norwegian krone because the country is a large supplier of oil.
Technically, what should interest traders is the fundamentals which have given impetus to the bearish direction of the USD/NOK. The ability of the Forex pair to not correlate to the broad market is actually a positive sign which shows financial houses are pursuing a different path with the Forex pair. As of this writing, the USD/NOK is trading below the 8.60000 level and if this resistance area continues to prove durable it could be a signal additional downwards momentum may be generated.
The 8.50000 price level has been flirted with in early trading today and was touched yesterday too. Previous to these lows the last time the USD/NOK traversed these ratios was in the first week of July. If the 8.50000 level is challenged below there is reason to suspect technically the 8.48000 to 8.44000 ratios could see a test rapidly escalate.
Speculators who feel anxious about the bearish momentum of the USD/NOK going against the results of the broad market need to consider both technical and fundamental issues which have been demonstrated. The ability of the USD/NOK to create downward momentum is evidence of a healthy trading environment.
Traders who want to sell the USD/NOK on slight moves higher and wager on more downside price action may be making a logical speculative choice short term. The USD/NOK can move fast because of its rather incremental value changes when large amounts of leverage are being used. Traders are reminded to use proper risk management. Selling the USD/NOK should be done while using solid stop loss orders which allow for the Forex pair to trade.
Norwegian Krone Short-Term Outlook
Current Resistance: 8.60100
Current Support: 8.53700
High Target: 8.68300
Low Target: 8.48750
