USD/NOK traded lower today, after it hit resistance slightly above the 10.800 key barrier, which acted as the neckline of a “double top” formation completed yesterday. On top of that, the rate has also broken below the upside support line drawn from the low of March 6th, which combined with the completion of the aforementioned pattern, may have turned the short-term outlook to the downside.
If the bears are willing to stay in the driver’s seat, we could soon see them aiming for the 10.400 zone, marked by the inside swing high of March 16th. If they are not willing to stop there, we could see them diving towards the low of the day after, at around 10.160. Another break, below 10.160, could extend the slide towards the 9.875 area, defined as a support by the low of March 13th.
Shifting our attention to the short-term oscillators, we see that the RSI runs below 50, points down and looks to be heading towards 30. The MACD lies below both its zero and trigger lines, pointing down as well. Both indicators detect downside speed and corroborate our view for some further declines in this exchange rate.
On the upside, we would like to see a decisive rebound above the 11.240 barrier, marked by an intraday swing high formed on Tuesday, before we start reexamining the bullish case. The rate would already be above the pre-mentioned upside line and may encourage the bulls to sail towards the 11.640 hurdle, marked by an intraday swing high formed on Monday. If that barrier does not hold either, its break may pave the way towards the peaks of Friday and Monday, at around 11.910.
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