USDNOK resumes the downtrend today after yesterday’s short break and is approaching the yearly lows as investors continue to dump USD. The rising number of new coronavirus cases threatens the economic recovery in the USA, as many states started to impose new restrictions on dining and bars.
The unemployment rate despite the recent improvement in data continues to be in historically high levels for the country, and that also shows up in consumer confidence. The Conference Board’s Consumer Confidence Index (CB) came in at to 92.6 in July from 98.3 in June, below the economist’s expectation of 94.5. The Consumer Expectations Index also falls to 91.5 from 106.1.
On the other hand, the economy in Norway shows clear signs of improvement after the lockdown. Yesterday reported that Norway Retail Sales increased to 5.7% in June from the previous 2.8%. The economy contracted by 2.1% in the first quarter, and now Norges Bank expects a 3.5% contraction in 2020 and a return to 3.7% growth in 2021.
USDNOK investors later today await the FOMC monetary policy decision that might be the catalyst for the next move in the pair. Economists expect Norway’s central bank to keep interest rates unchanged at 0-0.25%.
USDNOK Daily Analysis
USDNOK trades 0.32% lower at 9.0785 hovering around the lower bound of the descending triangle that formed since the March highs. The technical outlook is bearish while a break below the triangle might push the price down to 7.25 mark. Bears should wait for the break to start new short positions.
On the upside, the initial resistance stands at 9.1346 the daily high. A move above that level might challenge 9.2659 the high from July 24 trading session. A break above 9.2659 might test 9.4811 the 50-day SMA.
USDNOK Daily Chart