Technical Analysis – GBPNOK remains positive; sellers halt further advances

Anthony Charalambous, XM Investment Research Desk

GBPNOK buyers have reemerged and are pushing higher again after gains were frozen by sellers who reversed the price back down off a forty-month high of 11.97. Despite the positive momentum slightly weakening, the positive outlook still looks to be intact, something also backed by the upward slopes in the simple moving averages (SMAs).

The MACD, although remaining deep in the positive region, has slipped below its red trigger line, while the RSI, having dropped out of the overbought area, is now heading up for the 70-level. Additionally, another positive signal is the 100-day SMA approaching the 200-day one.

If buying interest continues, the bulls may push the price to retest the fresh forty-month high of 11.97. Overcoming this, the climb may stretch to the 12.11 resistance level, which is the 161.8% Fibonacci extension of the down leg from 11.51 to 10.54. Moving higher the 12.24 resistance could draw traders’ attention.

To the downside, if the sellers retake the wheel and steer the price back down, initial support could come from the swing low of 11.69 ahead of 11.63, which is the 23.6% Fibonacci retracement of the up wave from 10.54 to 11.97. Lower, a support region of 11.54 to 11.51 could hinder the fall to test the 50-day SMA in the 11.38 region. Beneath this, the inside swing high of 11.33 could challenge the bears ahead of the 50.0% Fibo of 11.25, followed by the 200-day SMA around 11.14.

In brief, the short-term bias is bullish. However, a close above 11.97 would reinforce it, while a close below 11.51 would turn the bias back to neutral.