The USD/NOK pair had a positive session during the day on Friday, as we continue to see upward pressure on the US dollar. After all, the Norwegian krone is going to be tied to the oil markets which of course have been very soft lately to say the least. You can see that on the chart I have drawn a yellow triangle, which represents the triangle that we are forming at the moment. Because of this, I believe that we will eventually break above the top of it at the 7.85 handle. Once we do, the technical analysis dictates that we should continue to somewhere in the neighborhood of 8.25 or so.
I need to see a daily close above the 7.85 level to get involved of course but I believe that it is in fact going to happen. Pullbacks could offer buying opportunities, but at the end of the day I don’t think that we will get much in the way of those opportunities. After all, we are getting fairly close to the end of the triangle and the point where we need to break out.
Soft oil markets should continue to push this pair higher
The oil markets in general have been very soft lately, so I believe that this market will continue to go higher as not only does the price of oil seem to dictate a lesser valued Norwegian krone, and as a result it makes a lot of sense for this market continues to grind higher. With that being the case, the market should continue to offer value every time it does dip, but we are getting again, close to that area that we need to break out of to make this triangle valid.
I believe that buying pullbacks every time they appear after the breakout will be the way to go going forward. At this point in time, I don’t really see an opportunity to sell this market, as the oil markets simply offer no real hope for the krone.
