The USD/NOK pair is one that a lot of you will not normally trade, unfortunately pushed away by a larger than usual spreads. However, you have to keep in mind that the PIP value is much lower than what you are used to dealing with. Because of this, a 50 PIP spread looks scary, but at the end of the day it really isn’t any more than anything else in the Forex markets.
Having said that, you have to understand that Norway is a mass exporter of crude oil, and as a result this pair tends to follow the oil markets but in an inverse manner as it obviously goes higher with the value of the US dollar. Because of this, it makes sense of this pair has continue to grind higher, and there was a technical event during the session on Thursday the caught my attention.
When shooting stars break, that means something.
Anytime we break above the top of the shooting star, that’s me shows that there is plenty of buying pressure, and this is even more true when there’s been to in a row that had been broken above. Because of that, and the fact that we are at highs again, I think that this pair has quite a bit farther to go. The oil markets look absolutely sick, so it makes sense that Petro currencies such as the Norwegian krone will suffer. With that being the case, I am looking to buy this market on pullbacks, and recognize that we could go much, much higher. In fact, it would not surprise me at all to see this market reach for the 6.50000 level. This of course is more of a longer-term trade, but this is the type of pair that you want to hang onto the trade for a considerable amount of time. After all, it does tend to trend very nicely for quite some time. I see no reason to sell this market at all, and believe that we have plenty of support down at the 6.35000 level, as well as the 6.30000 level.
