- The US dollar initially pulled back a bit against a Norwegian currency during the early session on Wednesday but has since recovered.
- It's probably worth noting that we are near the 61.8% Fibonacci retracement level of the recent rally and bounced quite hard from there during the Tuesday session.
- The question now, of course, is going to be how we behave from here.
- We are roughly in the middle of the consolidation range between 10 and 11, and therefore, I think you are more likely than not setting up for some type of choppiness.
I do favor the upside at the moment, but it's also worth noting that crude oil was a little oversold, so that might be part of why the Norwegian krone is starting to pick up a little bit of help. Longer term though, the interest rates in America remaining higher for longer should continue to make the dollar at least somewhat attractive. Keep in mind USD/NOK is a pair that can be very noisy, but it does tend to trend over the longer term and is more of an investment.
Interest Rates Don’t Make Much Difference
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The interest rate differential between the two is somewhat negligible. It's not like there's a massive difference. So that's not a main driver like you would see perhaps the US dollar against the Japanese yen. With that being said, the 200 day EMA is near the 10.65 level above. So that could offer a little bit of resistance, but ultimately the market has been somewhat range-bound. So, I think you have to look at that as a minor inconvenience. If the market were to break down below the 10.40 level, then we could start to unwind and try to make it back towards the 10 level. But right now, I think we're just consolidating, trying to build up enough momentum for the next move, which should become rather obvious once it happens.
Once that happens, it is likely that we will see a sizeable move, and I plan on being involved with it. The market is one that a lot of people ignore, but it can be profitable if you swing trade it. Scalping is still a bit difficult, with the spread widening at times, so therefore make sure you are willing to be involved for more than just a few moments.
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