We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • The US Dollar appears to be back on the offensive against ASEAN FX such as the Singapore Dollar and Malaysian Ringgit. The Philippine Peso gained. What does USD face from here? Find out from @ddubrovskyFX here: https://t.co/U8VGdJPIST https://t.co/67Qq4n8Tet
  • LIVE NOW: In this session, Currency Analyst @ddubrovskyFX discusses traders' positioning as a key element of market analysis to determine the prevailing and future price trends. https://www.dailyfx.com/webinars/998956395
  • Heads Up! Will be starting soon. I will be resuming last week's discussion on equities to see what positioning can say about the prevailing trends, signup below https://t.co/5WGeehCLdh
  • 🇯🇵 JPY Trade Balance - BOP Basis (Yen) (FEB), Actual: ¥1366.6b Expected: ¥1215.0b Previous: -¥985.1b https://www.dailyfx.com/economic-calendar#2020-04-07
  • 🇯🇵 JPY Machine Orders (YoY) (FEB), Actual: -2.4% Expected: -3.0% Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-04-07
  • 🇯🇵 JPY Machine Orders (YoY) (FEB), Actual: 5% Expected: -3.0% Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-04-07
  • Australia outlook cut from stable to negative by S&P - BBG #AUD
  • #RBNZ Assistant Governor Christian Hawkesby: - The central bank is "very open" to changing the size of its QE program - There is a limit to how much of the bond market the RBNZ can purchase - Monetary authorities open to increasing QE in a "rapidly evolving situation" - BBG #NZD
  • Heads Up:🇯🇵 JPY Machine Orders (YoY) (FEB) due at 23:50 GMT (15min), Actual: N/A Expected: -3.0% Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-04-07
  • Heads Up:🇯🇵 JPY Trade Balance - BOP Basis (Yen) (FEB) due at 23:50 GMT (15min), Actual: N/A Expected: ¥1213.6b Previous: -¥985.1b https://www.dailyfx.com/economic-calendar#2020-04-07
Big News That Couldn't Budge USD/NOK

Big News That Couldn't Budge USD/NOK

2014-01-06 14:25:00
Rafiul Hossain, Head Forex Trading Instructor
Share:

Talking Points:

  • Broad Trading Range That Has Yet to Be Broken
  • Notable Divergence from MACD Indicator
  • Fundamentals That Support NOK Strength

Since peaking above 6.22 in November, USDNOK has since established a broader trading range between 6.05 and 6.22, which has not been broken, even with significant policy news coming from the most recent Federal Open Market Committee (FOMC) meeting, where the central bank formally announced tapering of asset purchases.

Judging by the inability of the US dollar (USD) to take out the November highs against the Norwegian krone (NOK), it appears that tapering expectations were already priced in.

See recent: Too Much of a Good Thing for USD/NOK

Now, with the ‘’big’’ tapering news behind us, we still do have higher lows since the USDNOK bottom in September, although the pair has failed to make a higher high. In my humble opinion, we should ride out the ongoing fight between 6.05 and 6.22 in order to determine the prevailing direction for early 2014.

Guest Commentary: Range Trading Prevails in USD/NOK

Big_News_That_Couldnt_Budge_USDNOK_body_GuestCommentary_RafiulHossain_December30A_1.png, Big News That Couldn't Budge USD/NOK

Support: 6.05, 5.97-5.95, 5.90-5.87

Resistance: 6.22-6.25, 6.30, 6.50

After pricing in expectations for tapering by the Federal Reserve, the dollar posted strong gains against the krone in November, and USDNOK peaked right around the 6.22 level. Since then, the price action has been confined between 6.05 and 6.22.

It bears noting, however, that we see a negative divergence between price and the Moving Average Convergence/Divergence (MACD) indicator, which favors more consolidation or even a deeper pullback in USDNOK in upcoming weeks.

Even with higher lows, USDNOK failed to make a higher high since the bottom in September. The current landscape looks a bit unclear as well, which means that initiating positions in either direction involves higher-than-normal risk.

Furthermore, we do not have any clear short-term technical patterns that support a turning point for either bulls or bears. For that reason especially, I find it best to ride out the current trading range or wait for a better technical set-up before initiating any new positions in USDNOK.

Fundamental Factors in Play for USD/NOK

The Norwegian krone (NOK) has been weak throughout the fourth quarter of 2013, and this could boost Norway’s export industry in the year ahead. This NOK weakness is being caused by slow Norwegian economic growth, which is being driven by weaker growth in the oil industry, as well as in general construction and consumer spending.

Given the slowdown in oil investment, stronger export growth and more breathing room for the Norges Bank should keep the nation’s economy going and maybe even surprise to the upside. The new government, lead by Prime Minister Erna Solberg, supports the easing of bank credit policies in the year ahead, which should support a stronger housing market and general investments.

Furthermore, a stronger NOK may prevail in early 2014 because the currency is now weaker than the fundamentals in the Norwegian economy. It’s very possible that these oversold conditions have simply been caused by low liquidity in the market, and particularly in USDNOK, around the holidays.

Trade Idea for USD/NOK

Sometimes the best trade is no trade at all, and in the current conditions, it is best to be outside the market and simply observe USDNOK. Enter only when a favorable set-up emerges that provides the desired risk/reward profile.

I am currently looking for a reversal pattern in either direction in order to resolve the broad trading range that’s been established between 6.05 and 6.22. A ‘’perfect’’ set-up could be a washout of either longs or shorts in USDNOK, but for now, it is too difficult to see what the next tradable move will be for this pair.

In the meantime, while we wait it out, I wish all the readers at DailyFX.com a Happy New Year!

By Rafiul Hossain, Guest Analyst, DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.