USD/NOK Trading Outlook: Short Term Bearish, Long Term Bullish
USD/NOK Trading Strategy – Short Term Bearish, Long Term Bullish
- USD/NOK has been on downtrend since January 4
- The pair is approaching the March support line
- Outlook: short-term bearish, long-term bullish
See our free guide to learn how to use economic news in your trading strategy!
USD/NOK broke through a significant support range on January 30 and is now trading below 8.4382 and is approaching the March support. The pair’s movement recently appears to be less dictated by economic data coming out of Norway – though it does play a factor – but more by the Fed’s policy.
USD/NOK – Daily Chart
At the most recent FOMC meeting, the central bank did not raise rates and gave off what the markets perceived as a dovish tone to policy. This might explain why the pair dropped almost one percent after the Fed said the case for raising rates has somewhat weakened.
Since early January, economic news out of Norway has been overperforming relative to economists’ forecasts according to the Citi Economic Surprise Index. News-flow has been choppy over the past year however, with the Citi index frequently dipping into negative territory to indicate underperformance.
These inconclusive cues may persist for now, but economic data may begin to undershoot forecasts more frequently and with greater magnitude later into 2019.
Click here to see theNorwegian Krone outlook for 2019!
Those looking to go long at 8.6323 might have the upper hand because at that point the pair would have already breached several price barriers. Near-term, the pair will have to overcome the January-25 resistance and almost immediately after face the 8.4382-8.4518 range. Fundamental forecasts suggest this could happen with relative ease, but in the near-term the pair may struggle to reach the price target.
USD/NOK – Daily Chart
USD/NOK TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.