Potential signal:
- On a pullback to 10.50 NOK, I am a buyer.
- I will have my stop loss at 10.40, and a target of 10.7350 above.
The US dollar has fallen rather significantly during the trading session on Wednesday against the Norwegian Krone. It's also worth noting that it is a market that's heading into the Independence Day holiday in America, and that has a major influence on liquidity or whether or not people are willing to put on any type of risk.
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The market has previously been consolidating between the 10.75 level above and the 10.45 level below. The size of the candlestick is rather negative, but I think in general, USD/NOK is a market that continues to stay in this range. If we can turn around and break above the 10.75 level on a daily close, then I think that the US dollar continues to go much higher, perhaps reaching the 11 level.
On the other hand, if we break down below the 10.45 level, then we could see the US dollar really start to fall apart, perhaps even heading down toward the 10 level. However, I think we are more likely than not going to see a lot of choppiness in thin markets as the United States will be celebrating Independence Day on Thursday. We do have the jobs number coming out on Friday and that could have a major influence and obviously cause a lot of noisy behavior.
Noisy Will be the Future
In general, this is a market that I think continues to be noisy, but this more or less is a market that is probably stuck in the summer range and the doldrums that we see quite often in the Forex markets. Because of this, I assume we continue to see a lot of noise around this potential range, and therefore I assume that pullbacks offer buying opportunities. Because of this, the market is one that you will have to be patient with, especially with the next two days being a serious lack of liquidity, and therefore I think it continues to be a “buy on the dips” market.
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