USD/NOK retreats from multi-months highs as bulls take a breather
|- USD/NOK struck a high since late May on Thursday of 11.276.
- On Friday, the pair retreated to 11.170, seeing 0.20% losses.
- The Greenback trades soft in FX markets after PCE data from September.
In Friday’s session, the USD/NOK trades with losses, mainly driven by investors taking profits after the pair jumped to its highest level since May 31 on Thursday. Contributing to the downward trajectory, the US Dollar is trading weak after the September Core Personal Consumption Expenditures was reported to have decelerated as expected.
In line with that, the U.S. Bureau of Economic Analysis reported that the Core PCE Price Index from September aligned with the consensus. It came in at 3.7% YoY vs the expected 3.7% but fell in relation to it last reading of 3.8%. As a reaction, the 2-year rate stands at 5.03% while the 5 and 10-year yields are seen at 4.79% and 4.85%, respectively, with little movement.
It is worth noticing that higher US Treasury yields drove the recent NOK’s weakness, and as the rates retreat from multi-year highs, it limits the upward momentum from the pair. In addition, hawkish bets on the Federal Reserve (Fed) remain subdued, which could also pause the pair’s gains. That being said, the Fed meets next week, and investors will look for clues in the monetary policy statement and in Chair Powell’s press conference to continue betting on the next decisions. A pause for next week is practically priced in, but some market participants still forecast some odds of the Fed hiking by 25 bps in December, but those expectations may rise or fall based on the bank’s and Powell’s stance.
USD/NOK Levels to watch
The daily chart highlights a neutral to bullish technical outlook for USD/NOK as signs of exhaustion of the buying momentum become evident. The Relative Strength Index (RSI) displays a negative slope but is still in bullish territory, while the Moving Average Convergence (MACD) presents neutral green bars. However, the pair is above the 20,100,200-day Simple Moving Average (SMA), indicating a favorable position for the bulls in the bigger picture.
Support levels: 11.155, 11.083, 11.023 (20-day SMA),
Resistance levels: 11.200, 11.235, 11.276.
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.