Technical Analysis – GBPNOK jumps above downtrend line; unable to break 23.6% Fibo level

Anthony Charalambous, XM Investment Research Desk

GBPNOK rallied up during the previous week from the nine-and-a half-month low of 10.5915, breaking above the downtrend line to pause at the 23.6% Fibonacci retracement level of the downleg move from 11.5127 to 10.5915, of 10.81.

The Kijun-sen line has flattened, as well as the momentum indicators of the MACD and the RSI in the daily timeframe. The MACD stands above the trigger line, while the RSI holds near 50-neutral level.

To the upside, an initial push above the 23.6% Fibo of 10.81, would bring the resistance hurdle of 10.86 into focus and if surpasses this line could turn to bullish. Price would then encounter the 50-day SMA before facing the 38.2% Fibo of 10.942. If the price moves north the real test would be at the 200-day SMA coupled with the 50.0% Fibo of 11.05.

In the negative scenario, the price would need to hit the 23.6% Fibo of 10.81 before collapsing down, to retest the freshly formed low of 10.5915. If breached the congested lows of 10.58 and eleven-month low of 10.5545 would come under pressure.

Summarizing, bearish bias is still prevailing in the medium-term, but the short-term pullback could turn the bias to neutral to bullish on a daily close above 10.86.