A rallying Norwegian Krone sent the USDNOK towards 3-week lows, as the commodity currency benefitted from higher crude oil price action and upbeat economic data on the industrial front. Industrial production and manufacturing production in Norway surged 5.4% and 0.6% respectively on an annualized basis in February 2020. Industrial production was the star performer, coming in at a value that is miles better than the 0.3% seen in the previous month. This increase in industrial production is the 3rd annualized increase in a row and also represents the highest increase this monthly data has shown in nearly 31 months.
These upbeat data boosted sentiment on the Norwegian Krone, which was already seeing increased bids after the central government said the coronavirus outbreak in Norway was under control. Data presented by the government showed that new infections had dropped to 0.7%, after showing a 2.5% increase in the number of cases nearly three weeks ago.
The USDNOK is currently trading 2.57% lower on the day, at the 10.15420 price level as at the time of writing.
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Technical Outlook for USDNOK
A look at the daily chart will show that a few days of range trading between the 50% Fibonacci retracement (ceiling) and the 61.8% Fibonacci retracement level (floor) took place. Price is now pushing lower towards the 78.6% Fibonacci retracement from the swing low of 9 March to the swing high of 19 March 2020.
Price has now entered into the support zone shown on the chart, and a breakdown of this support is required for the USDNOK to target the 9.84305 price level marked by the 78.6% Fibonacci retracement level.
On the flip side, price recovery could occur if the OPEC + meeting has negative consequences for crude oil price, which allows the USDNOK to target the 10.64733 price level formed by the 50% Fibonacci retracement level.
For the USDNOK, crude oil price action may be the primary factor to dictate price movement for the week, with the next Norges Bank interest rate decision still a month away.
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