USDNOK rallied hard this week and now eyes resistance above at the 10.00 level. The pair broke through the 50 day moving average last week and found support to keep the bullish bounce in play for the greenback.
Oil prices are hovering around the $40.00 level, but this is still capping the oil bounce and putting pressure on the Kroner. Higher oil inventories are still weighing on the price of crude after yesterday’s release from the American Petroleum Institute saw a rise of 691,000 barrels this week after analysts expected a fall of 2.3 million.
Oil demand forecasts have been reduced again in the last with expectations near 90 million, down 10% from last year’s 100 million daily demand. The outlook for oil will also be hit by further lockdowns in global economies if virus cases continue. The U.K. is said to be mulling a 14-day “circuit-breaker” to slow th espread of cases, but we heard this back in March before and extended lockdown of around three months.
Norway’s economy dropped by 4.7% in the second quarter and the country’s inflation rate rose to 1.7% in the last print, which may cap any U.S. dollar gains if Norges Bank comes under pressure to hike rates. Norway’s oil exports have dropped from 30000 NOK million in December to 18000 August, but the country supplies 20-25% of EU demand and further lockdowns would pressure the economy further.
USDNOK Technical Outlook
USDNOK found support at the 50 day moving average and has rallied this week to 9.38. The larger support levels are at 9.75 and 10.00 and this will be the target. A close back below 9.20 would highlight weakness and further downside pressure. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
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USDNOK Daily Chart
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