- The US dollar has rallied significantly during the trading session on Tuesday against the Norwegian krone, breaking above the 10.6 level.
- This is an area that's been significant resistance recently.
- And the fact that we are breaking above here is a positive sign for the greenback.
That being said, I do think there is a lot of noise above and I do think that it is going to be difficult to break above the 10.75 level. However, I do think that we're at least going to attempt to do so. Keep in mind that the interest rate differential between these two currencies is almost non-existent. So, I think that takes all of that out of the equation. We also have to think about the possibility that we just formed a bit of a double bottom near the 61.8% Fibonacci retracement level. And that of course could offer a bit of technical support as well.
Noise Could be the Norm Going Forward.
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In general, this is a market that I think will continue to be very noisy. And that does make a certain amount of sense considering that the. Norges bank recently cut rates but doesn't look like it's going to be aggressively loose with its monetary policy on the other side, you have the federal reserve, which people still think are going to cut between now and the end of the year, but it doesn't really look like they're going to do so quickly. We are getting close to an election in the United States and that will keep them quiet because the last thing they want to do is seen as being politicized. Although let's be honest here, they most certainly are.
So, with that, I think you've got a situation where we are probably setting up for more of a range bound market between the 10.50 level and the 10.75 level above, I would just trade back and forth and accordingly. This could be a pair that is very good for range bound short-term traders.
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