The Norwegian Krone, already pressured by falling crude oil prices, was weakened further after the Norges Bank held rates at 0.0%, sending the USDNOK higher. The USDNOK is now 5.61% higher this week and continues to attract strong bids as the pair seeks to storm away from its recent lows. With today’s price action, this is the highest the USDNOK has attained in three months.
The Norges Bank, which is Norway’s central bank, maintained its record-low interest rate at zero percent, which was in line with market expectations. It also said that any further hikes could be as far as two years away. The Norges bank acted to cut interest rates in response to the coronavirus pandemic. Yesterday, Norwegian unemployment was said to have risen to 5.2% in the period covering May to August 2020. The USDNOK also sees some uplift from added strength on the US Dollar.
The pair now trades at 9.56513 as at the time of writing.
Technical Outlook for USDNOK
The recovery on the pair has taken it above the 9.22531 and 9.48835. However, we will need the weekly candle to close above the latter price with a 3% penetration at the end of trading tomorrow, to conclusively call a breakout. This would then open the door towards 9.80889, with 10.13330 also lining up as a potential upside target.
On the flip side, failure to confirm the break of 9.48835 could allow the pair to pull back towards 9.22531, with the potential of a further push towards 8.80393. However, this latter move would have to rely on a successful breakdown of the long term trendline, which provided support for the lows of price action from July 2018 to August 2020.
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USDNOK Weekly Chart
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