Marshall Gittler
Trading Analysis
USD/NOK
The dollar was unchanged or lower against its G10 counterparts during the European morning, with the only exception being AUD. The greenback traded near its opening levels against SEK, EUR and GBP, while it depreciated against NOK, JPY, CAD and CHF.
The slowdown in China’s retail sales and industrial production for January hit brought back the risk-off picture as AUD is down again while JPY and CHF are picking up.
The data coming out this morning once again passed unnoticed. Sweden’s unemployment fell by a percentage point in February, but missed market expectations of a 2 ppt fall. SEK weakened at the release, but recovered within minutes to trade near its early morning levels. The ECB monthly bulletin held no surprises as it more or less repeated the same phrases that were in the latest policy statement.
USD/NOK moved lower, breaking below the 5.9365 hurdle, which coincided with the 161.8% extension level of the 24th Jan – 04th Feb advance. I would expect the decline to continue in the near future and challenge the low of 5.8620 (S1), which coincides with the 200% extension. The MACD, already in a bearish territory crossed below its signal line, confirming the strengthening negative momentum. Nonetheless, the RSI seems ready to exit overbought conditions and since the rate is testing the lower bound of the downward sloping channel, a minor bounce before the bears prevail again cannot be ruled out. As long as the rate is trading within the blue downward sloping channel and below both the moving averages, I see a negative picture.
Support: 5.8620 (S1), 5.7330 (S2), 5.6615 (S3)
Resistance: 5.9365 (R1), 5.9800 (R2), 6.0565 (R3)
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