The USD/NOK has consolidated slightly and the Forex pair remains within the vicinity of important support. The USD/NOK had endured a rather strong bullish trend since the end of the first week in June, but after hitting a high of nearly 9.10000 on the 19th of August there has been a rather steep reversal. As of this morning, the USD/NOK is trading near the 8.71000 juncture with quick fire changes in value per fractional movements.
The last time the USD/NOK sincerely challenged the ‘lower’ levels it is now traversing was in the second week of July. Speculators who take a look at a three-month USD/NOK chart may be inclined to believe that the Forex pair remains within the upper boundary of its range. A different perspective can be contemplated via a six-month chart which could suggest that if current support levels are punctured lower the trend may have a legitimate chance of continuing its bearish reversal. It should be said the USD/NOK is also correlating rather well to global Forex conditions.
The USD/NOK did drop rather dramatically after it punctured the 8.80000 juncture lower on the 27th of August and in the past few trading sessions has shown an ability to stay under the 8.72000 level. The sustained value within the lower tier of its short-term range may be an indication the USD/NOK has another burst of price action ahead sooner rather than later.
Traders who believe more bearish sentiment will be seen in the USD/NOK may be making the correct speculative decision. However, the velocity of the selling last week may continue to make short-term support levels appear durable. It is possible the current consolidation within the USD/NOK is taking place as financial institutions gather their technical evidence and contemplate equilibrium. Having gone through a rather steady bullish trend the past three months, there may be market participants who are not yet convinced that strong selling is going to continue.
If the 8.70500 to 8.70000 begins to be sincerely challenged this could cause alarm bells to ring among traders who want to wager on more bearish action however. The recent consolidated price range of the USD/NOK is not likely to hold. But conservative traders who believe the range will be choppy could be buyers within the current price vicinity based on an assumption that nearby resistance will be tested.
Norwegian Krone Short-Term Outlook
Current Resistance: 8.72400
Current Support: 8.70100
High Target: 8.79300
Low Target: 8.64400
