USD/NOK declines to lows in over a month after US CPI
|- The USD/NOK declined to 10.887, seeing 1.70% losses.
- Soft inflation figures from the US fueled risk on flows.
- Markets are betting on a more dovish Federal Reserve.
- The US will report Retail Sales and PPI figures on Wednesday.
The USD/NOK faced severe selling pressure on Tuesday, reaching 10.880 and seeing 1.70% losses. A weak US Dollar mainly drove the pair after the report of October inflation figures from the US, which came in softer than expected.
According to the official report of the US Bureau of Labor Statistics, the monthly Consumer Price Index (CPI) remained unchanged while experiencing a year-on-year increase of 3.2%. The Core measure was registered at 4% YoY, slightly lower than the prior 4.1%. After the report of soft Nonfarm Payrolls in early November, these figures reduced the likelihood of another interest rate increase by the Federal Reserve (Fed), immediately prompting a risk-on sentiment in financial markets.
The question is now how long the Fed will maintain rates at restrictive levels, and in the meantime, markets are betting on rate cuts in May 2024. On Wednesday, the US will report the Producer Price Index (PPI) and Retail Sales figures from October, which will likely give further clues on the Fed's plans.
USD/NOK levels to watch
Based on the daily chart, the USD/NOK has a bearish technical outlook as indicators are flashing signs of sellers gaining ground after pushing the pair down by more than 3% since last Friday. The Relative Strength Index (RSI) displays a negative slope in the bearish region, while the Moving Average Convergence (MACD) histogram shows rising red bars.
Evaluating the broader scale technical outlook, the pair is also below the 20 and 200-day Simple Moving Averages (SMAs), but above the 100-day SMA, indicating that the bulls are still holding some dominance over the bears on the broader time horizon despite the sellers being in command in the short term.
Supports: 10.881, 10.850, 10.775.
Resistances: 11.000, 11.030, 11.119 (20-day SMA).
USD/NOK daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.