USD/NOK logs 17-year high; corrects lower.
USD/NOK rallied up resulting in a breach of the previous high of 8.9906 from January 2016, generating a fresh high at 9.0413. Then the bears came on board and corrected the pair lower past 8.9906 and currently, the price has found some support at the flat Tenkan-Sen average.
Heading north is the 50-, 100- and 200-day simple moving averages (SMAs) reflecting a bullish bias. Although the sentiment is bullish, the momentum indicators which are in positive territory, paint a picture of some weakness in the move up. The MACD has crossed below its red trigger line and the RSI deflected off the 70 level and is headed down towards the uptrend line.
If the correction down picks up, initial support could come from 8.9060, which is the 23.6% Fibonacci retracement level of the up wave from 8.4664 to 9.0413. Falling lower the 8.8220 support level could catch traders’ eyes once the 8.8470 support is breached, the former being the 38.2% Fibo and the latter the swing low on 09 August. If the bears insist, the price could move until the 61.8% Fibo of 8.6865 where the 50- and 100-SMAs also lie.
To the upside, if the bulls retake the wheel initial resistance could come from 8.9906 before a shove higher could retest the 17-year high of 9.0413. Further gains could move the focus to the 9.0580 level, which is the 176.4% Fibo extensions of the down leg from 8.8020 to 8.4664.
Overall, the medium-term bias remains bullish. But a move lower than 8.6865 could shift the short-term picture to neutral.
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