- The US dollar initially pulled back just a bit against the Norwegian krone on Friday, but turned around and shot straight up in the air as the jobs numbers came out hotter than anticipated.
It’s worth noting that we recently bounced from the 61.8% Fibonacci retracement level, an area that a lot of technical traders will be paying close attention to. Because of this, I think a lot of the longer-term traders started to look at this through the prism of trying to find value. They have found it now, so the question becomes whether or not the US dollar can continue to rally?
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It’s probably worth paying close attention to the 10.75 NOK level, which sits just above as significant resistance. We have pierced and broken above the 200-Day EMA, as well as the 50-Day EMA late in the day on Friday. If we can break above the 10.75 level, then I think we will have crushed most of the resistance and I do think that it’s probably only a matter of time before buyers take off. On the other hand, if the market were to pull back from here I think there are plenty of areas that we could see support, not the least of which would be the 10.60 level.
Keep in mind that the oil market is highly influential on the Norwegian krone, but this pair might be a little bit different than many of the other ones due to the fact that the United States also produces a ton of crude oil markets. Given enough time, would not surprise me at all to see this market go back to the 11 NOK level, possibly even the 11.15 NOK level after that. That doesn’t mean we get there overnight, but I do think that’s what we are trying to do, although it might be a bit of choppy behavior between here and there. I have no interest in shorting this market anytime soon, at least not until we break down below the 10.33 level underneath.
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