- The U.S. dollar initially weakened slightly against the Norwegian currency in early morning trading on Wednesday but has since recovered.
- It’s worth noting that it is approaching the 61.8% Fib retracement level of the recent rally and bounced back quite strongly from there during Tuesday’s session.
- The question now, of course, is how do we act from now on?
- We’re pretty much in the middle of the consolidation range between 10 and 11, so I think it’s likely we’ll see some instability.
While I expect it to move higher at the moment, it is also worth noting that oil was a bit oversold. That may be one of the reasons why the Norwegian Krone has started to appreciate a bit. But in the long term, the dollar should remain at least somewhat attractive as US interest rates will remain high for a long time. Keep in mind that USD/NOK is a very volatile pair, but it does tend to trend over the long term and has a strong investment aspect.
Interest rates won’t change much
The interest rate differential between the two is negligible. It’s not a big difference. So, it’s not going to be a major factor, like USD vs. JPY. That being said, the 200-day EMA is around the 10.65 level mentioned above. So, it might be a little bit of resistance, but at the end of the day, the market is moving in a range to some extent. So, I think it should be considered a small inconvenience. If the market falls below the 10.40 level, we might start to unwind and try to get back to the 10 level. But right now, I think it’s just trying to consolidate and get enough momentum for the next move. If that happens, it should be pretty obvious.
If that happens, we will likely see some pretty big moves and I plan to get involved. This is a market that many ignore, but you can swing trade it to make money. Scalping is still a bit difficult and spreads can get wide, so be prepared to get involved for longer than just a few minutes.
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