Forex Market: USD/NOK daily trading forecast

Yesterday’s trade saw USD/NOK within the range of 6.3266-6.3611. The pair closed at 6.3455, gaining 0.19% on a daily basis.

At 6:41 GMT today USD/NOK was up 0.05% for the day to trade at 6.3459. The pair broke the first key weekly resistance and touched a daily high at 6.3539 at 6:05 GMT.

Fundamental view

Norway

Norway’s annualized index of consumer prices (CPI) probably slowed down to 2.1% in August from 2.2% in July, as the latter has been the highest annualized inflation level since January. In monthly terms, the index probably fell 0.3% last month, following a 0.7% increase in July. It reflects the change in the general level of prices of over 650 goods and services, which the population acquires, uses or pays for consumption. In case the CPI decelerated more than expected, this would have a bearish effect on the krone.

Nation’s annualized core CPI (CPI-ATE) probably fell to 2.4% in August from 2.6% during the prior month. This indicator is comprised by two main components – CPI-AE, which excludes energy costs and prices of raw materials, and CPI-AT, which is based on real current prices adjusted for taxes. CPI-ATE is the indicator, used by Norges Bank in order to set its interest rate policy. A lower than expected core CPI would lead to a sell-off in the national currency, as this reduces the probability of a rate hike. Statistics Norway is to release the official report on consumer inflation at 8:00 GMT.

Recent US dollar strength

The greenback touched highs unseen in almost six years against the yen on Tuesday on speculation that macroeconomic reports, scheduled for release from the United States at the end of the week, might urge the Federal Reserve Bank to introduce a rate hike in 2015. The next policy meeting of the Federal Open Market Committee is to be conducted on September 16th-17th.

Meanwhile, yesterday EUR/USD slumped to fresh lows, unseen since July 10th 2013, on diverging monetary policies and macroeconomic conditions in the United States and the Euro zone.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 6.3444. In case USD/NOK manages to breach the first resistance level at 6.3624, it will probably continue up to test 6.3789. In case the second key resistance is broken, the pair will probably attempt to advance to 6.3967.

If USD/NOK manages to breach the first key support at 6.3277, it will probably continue to slide and test 6.3099. With this second key support broken, the movement to the downside will probably continue to 6.2932.

The mid-Pivot levels for today are as follows: M1 – 6.3016, M2 – 6.3188, M3 – 6.3361, M4 – 6.3533, M5 – 6.3706, M6 – 6.3878.

In weekly terms, the central pivot point is at 6.2486. The three key resistance levels are as follows: R1 – 6.3225, R2 – 6.3638, R3 – 6.4377. The three key support levels are: S1 – 6.2073, S2 – 6.1334, S3 – 6.0921.