A USD/NOK Event That's Been Months in the Making
- Multi-Month Triangle Formation in USD/NOK
- 3 Moving Averages Supporting the Upside
- The "Ideal Scenario" for USD/NOK Bulls
USDNOK has broken out of the major triangle that has confined the pair since July. The top trend line of the triangle had been tested three times before it finally broke, giving some validity to the triangle.
To further bolster the bullish case for USDNOK, all three of the key four-hour moving averages (50, 100, and 200) have achieved a full bullish configuration, with the 50-period MA trading above the 100, which is trading above the 200-period MA.
With this breakout, we may see USDNOK rally above its recent highs at 6.2629 and continue higher.
Guest Commentary: USD/NOK Triangle Finally Breaks
The ideal scenario for USDNOK bulls would be a retracement down to re-test the triangle at 6.00 or so, which would provide a low-risk entry point and great risk/reward profile. Failing a pullback down to the 6.00 figure, some consolidation near the highs—like a flag or pennant formation—may offer a favorable entry point for new long positions.
By Liam McMahon, Currency Strategist, GlobalFxClub.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.