Technical Analysis – USDNOK’s positive picture watchful; sellers drive price below uptrend line

Anthony Charalambous, XM Investment Research Desk

USDNOK sellers are in the process of penetrating below the 8.1055 support – which is the 23.6% Fibonacci retracement of the up leg from 8.4664 to 9.3036 – after already violating the uptrend line drawn from July 18.

The short-term oscillators continue to reflect strengthening negative momentum as the price nears the 50-day simple moving average (SMA). The MACD, in the positive region, has declined below its red trigger line, while the RSI has crossed below its neutral mark into the bearish territory.

To the downside, the bears initially face the 50-day SMA around 9.0830 before the nearby swing low of 9.0450 from October 11. Passing this, the 38.2% Fibo of 8.9845 could play out, before a more significant support area around the 50.0% Fibo of 8.8845, where the 100-day SMA is also located. Following, the bears would need a decisive push lower to overcome the 8.8470 and 8.8220 supports, in order to test another region of 8.7865 to 8.7570, consisting of the 61.8% Fibo, the 200-day SMA and an inside swing.

If the bulls manage to drive the price back up, the uptrend line could initially restrict the test of the 9.2085 resistance, ahead of the multi-year high of 9.3036. Surpassing the peak of 9.3036 could see the pair test 9.3460, which is the 261.8% Fibonacci extension of the down wave from 8.8024 to 8.4664.

Overall, the short-term bias looks bearish below the trendline and a break below 9.0450 would confirm it. However, a shift back above the trendline would reinforce the bigger positive picture.