- The Norwegian Krona has been on the back foot for some time and now it looks like the US dollar is trying to break above the 11 level, which of course is a large round psychologically significant figure.
- There is a lot of resistance between here and the 11.20 level.
- So, I think it's going to take a certain amount of momentum to continue to push this market higher.
Short-term pullbacks at this point could be a bit of a buying opportunity, but I also think that it is going to take quite a bit of wherewithal and persistence to hang on to this market.
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Near the Top of a Range
For what it is worth, we are near the top of the overall range that we have been in for the entire year. The bottom, of course, has been the 10.4 Kroner area, but the 11 Kroner area continues to be the top. Therefore, I think you have to look at this through the prism of a market that is a little overdone. Short-term pullbacks are possible. I do think that they come into the picture, but given enough time, I imagine that the markets will eventually find value hunting. The 50-day EMA is currently hanging around the 10.75 level and is rising, so I think that helps as well. But as long as we can stay above the 50-day EMA, we should be in good shape.
Breaking down below that level could open up a move down to the 10.40 level, but I think in that scenario you have a lot of negativity with the US dollar overall. It's not necessarily a Norwegian Krone thing. All of this being said, watch the greenback around the world and if we can get above the 11.15 level, this could be a major breakout. If that happens, we should see the US dollar move across the board in the FX markets in general.
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