Rising crude oil prices have been good for the Norwegian Krone, helping it to advance to 2-month highs against the US Dollar. This phenomenon has kept the USDNOK on a downward trajectory as crude oil output cuts are helping oil prices to recover.
Brent crude oil price touched off an intraday high of $35.74, amounting to its highest price level in the last six weeks, while the WTI touched off 2-month highs at $32.89. The rise in crude oil prices and the Norwegian Krone mirror confirmations that members of the OPEC + alliance are complying with their allocated output cuts. As more countries scale back the lockdowns, hopes of rising demand are also leading to an increase in open interest, with short-term bullish outcomes.
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Technical Outlook for USDNOK
The strengthening of the Norwegian Krone has pushed the USDNOK below the 10.13330 support line. If today’s candle closes below this support, it confirms the breakdown of that area and allows the USDNOK to target the 78.6% Fibonacci price level at 9.84670. Below this level, a further support price level comes in at 9.48835, where the 28 Feb peak is located.
On the flip side, a drop in crude oil prices may allow the USDNOK to pick up. However, any advance in price must be able to breach the 10.13330 price level to the upside, which then allows the pair to target 10.32810 (61.8% Fibonacci retracement), 10.5000 as well as 10.66623 (50% retracement).
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