Dukascopy Bank Team
Dukascopy Bank SA
USD/NOK 4H Chart: Channel Down
Comment: Although USD/NOK appears to have formed a bearish channel, we are highly unlikely to see Dollar’s depreciation beyond 8.50 kroner. The reason is that the currency pair is closing in on the major rising support line that is drawn through the Aug 2014 and May 2015 lows. Accordingly, our base case scenario is a rally through the red trend-line at 8.65. This will imply a test of the 8.77-8.74 area. However, considering the density of the supply zone, it may take some time before the bulls push through and set eyes on the January high at 8.99. In the meantime, the US Dollar is oversold in the SWFX market—at the moment 72% of open positions are short.
USD/ZAR 4H Chart: Double Bottom
Comment: USD/ZAR is in the process of forming a double bottom. There were two attempts to break demand at 15.85, but both tries were unsuccessful, and as a result, the US Dollar is headed towards the potential neck-line at 16.45/41. If the price closes above this area, we will expect further recovery until 17 rands. Nevertheless, we should not forget about resistance at 16.78 (monthly R1 and weekly R2) that may trigger a correction.
Meanwhile, the sentiment is in favour of a rally, as the market is currently overcrowded with bears—72%. At the same time, weekly technical indicators are bullish, though there are mixed signals in the four-hour and daily time-frames.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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