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IronFX Essential Intraday Comment | 07/08/2015 USD/NOK

• The dollar traded unchanged against almost all of its G10 peers during the European morning Friday, ahead of the US employment report for July. The greenback was higher only against SEK and CHF, in that order.

• Norway’s industrial production rose 3.5% mom in June, from an upwardly revised 2.1% mom in May, adding to the recent encouraging data coming from the country. Manufacturing production however rose merely 0.1% mom, below expectations of 1.2% mom. NOK strengthened initially but gave back all the gains immediately to trade virtually unchanged against the USD. I would expect falling oil prices to continue to weigh on the Norwegian currency and to put it under renewed selling pressure in the short-term. In a bit longer horizon, the country’s CPI data to be released next week are likely to show whether the Bank could ease again in the near future. That could put further upward pressure on USD/NOK, in my view.

USD/NOK traded quietly during the European morning Friday, after it hit resistance at 8.3000 (R1). The short-term path looks somewhat positive. But given that this was the second unsuccessful attempt for the pair to break higher, and that there is negative divergence between both our short-term studies and the price action, I see the likelihood for a small pullback before the next positive leg, perhaps for another test at 8.2200 (S1). On the daily chart, the major path remains an uptrend. Therefore I would consider any minor-term declines as providing renewed buying opportunities. A break above 8.3000 (R1) would confirm a forthcoming higher high and perhaps target the 8.4000 (R2) zone, defined by the peaks of the 18th and 19th of March. The trigger for this positive leg could be a positive US employment report due out later in the day.

• Support: 8.2200 (S1), 8.1670 (S2), 8.0900 (S3)

• Resistance: 8.3000 (R1), 8.4000 (R2), 8.5000 (R3)

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