USDNOK continues its slide towards the yearly lows as a weak dollar, and faster than expected economic recovery in Norway supports NOK. Investors await the Norges Bank interest rates decision on August 20.
Norges Bank August Meeting Preview
Economists expect the Norways central bank to keep interest rates unchanged, and they don’t expect any critical signal from Norges Bank until the September meeting, as the bank will not provide a new interest rate path or a press conference. Norges Bank has cut interest rates three times since March to 0% from 1.5%, but in the June meeting signalled a rate hike in the first half of 2022.
The economy in Norway contracted by 2.1% in the first quarter, and now Norges Bank expects a 3.5% contraction in 2020 and a return to growth by 3.7% in 2021. Norway economy has presented some signs of improvement after the COVID-19 lockdown. The Retail Sales increased to 5.7% in June from the previous 2.8%.
Norway economy has boosted by the recent rally in crude oil prices as the country is Europe’s top oil producer.
USDNOK Daily Technical Analysis
USDNOK trades 0.13% lower at 8.8670 as the bears are in full control of the pair targeting fresh yearly lows. The recent break outside the descending triangle enhances the bearish momentum. The target price now for bears after the break of the triangle formation is at 7.25.
Initial support for the USDNOK pair stands at 8.8552 today’s low. The low from January 16, at 8.8473 would offer some buying interest. A break lower might challenge 8.7641 the low from January 7 trading session.
On the flip side, resistance would be met at 8.9030 the daily top. More sellers would emerge at 8.9549 the high from August 14. The next resistance stands at 9.0557 the high from August 11 which would also signal the return of the pair above the lower bound of the triangle.
USDNOK Daily Chart