The USDNOK looks set to end the week higher despite today’s intraday pullback that has provided respite for the Crown, after it slid to one-month lows versus the greenback.
A massive selloff in crude oil prices on Wednesday and Thursday provided the template for the oil-correlated Norwegian Krone to plunge to its lowest level since September 25, as crude oil prices look set to close lower for the second month in a row.
The rise in the USDNOK came as risk aversion seized the markets, following the announcement of new lockdowns in France and Germany. New coronavirus cases have spiked in the US and Europe and are approaching the levels seen at the onset of the pandemic in March. Crude oil stocks also rose by 4.3million barrels, which far exceeded the numbers for the week earlier that showed a 1.0 million barrels shortfall. However, crude oil prices on the Brent crude benchmark inched up slightly on Friday to trade 2.59% higher at $38.04 as at the time of writing. This has allowed an intraday pullback on the USDNOK, sending it to 9.51410.
Technical Outlook for USDNOK
Price made a fakeout from the symmetrical triangle to the south, before breaking out strongly to the north as the greenback picked up steam and the oil-linked Crown suffered due to the selloff in crude oil prices. The upside move has found resistance at the 200-day moving average, after hitting intraday highs at the 9.6000 psychological price area.
The 200-day moving average forms the dynamic resistance and further upside will depend on the price being able to break above this level. This opens the door towards the next resistance at 9.80889, with 10.13330 also forming an additional resistance target.
On the flip side, an extension of today’s rejection from the 200-day moving average will initially target 9.48835, with 9.37463 and 9.22531 serving as additional targets to the south. Supporting this price move would be a return of risky sentiment or an improvement in crude oil prices.