USD/NOK drops heavily to near 10.40 on surprise OPEC+ production cut

USD/NOK has delivered a gap-down open near 10.40 after a surprise oil production cut by OPEC+.
Fresh pledge of cutting overall oil production by 1.16 million bpd has led to an overall cut of 3.66 million bpd.
The odds for a further 25bp rate hike by the Fed remain solid despite softening of the US PCE Price Index.

Sagar Dua FXStreet

The USD/NOK pair has witnessed an intense sell-off in the Asian session as investors discount the impact of the surprise drop in oil production announced by Saudi Arabia and other OPEC+ members. The oil cartel will cut the overall oil production by around 1.16 million barrels/day, which has strengthened the Norwegian Krone. Fresh pledge of cutting overall oil production by 1.16 million bpd has led to an overall cut of 3.66 million bpd.

The surprise move by OPEC+ in an attempt to support the oil price has strengthened the currencies of oil-exporting countries, which will receive more funds on exporting oil. Bloomberg reported that the surprise move by OPEC+ would increase the risk of higher inflationary pressures globally and might force central banks to keep policy rates higher for longer.

Meanwhile, S&P500 continued its winning spree on Friday in hopes of no further casualties to the United States banking sector, portraying a risk-on mood. However, fresh oil production cuts could spoil the market mood ahead, therefore, a cautionary approach would be advisable.

The US Dollar Index (DXY) recovered firmly on late Friday to near 102.60 despite more-than anticipated softening of US core Personal Consumption Expenditure (PCE) Price Index data. On a monthly basis, the US PCE Price Index accelerated by 0.3%, lower than the consensus of 0.4% and the former release of 0.5%. Also, the annual US PCE Inflation figure soften to 4.6% from the consensus and prior release of 4.7%. However, the move has not eased expectations of further 25 basis points (bps) rate hike by the Federal Reserve.

As per the CME Fedwatch tool, the odds for a 25bp rate hike to 5.00-5.25% for May monetary policy meeting stand more than 53%.

USD/NOK

Overview
Today last price	10.426
Today Daily Change	-0.0463
Today Daily Change %	-0.44
Today daily open	10.4723

Trends
Daily SMA20	10.5509
Daily SMA50	10.326
Daily SMA100	10.1347
Daily SMA200	10.1356

Levels
Previous Daily High	10.4877
Previous Daily Low	10.3663
Previous Weekly High	10.5616
Previous Weekly Low	10.3468
Previous Monthly High	10.8784
Previous Monthly Low	10.2768
Daily Fibonacci 38.2%	10.4413
Daily Fibonacci 61.8%	10.4127
Daily Pivot Point S1	10.3965
Daily Pivot Point S2	10.3207
Daily Pivot Point S3	10.2751
Daily Pivot Point R1	10.5179
Daily Pivot Point R2	10.5635
Daily Pivot Point R3	10.6393

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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