Trading opportunities for currency pair: a spike pattern has appeared on the daily. The fall stopped near a strong support. I’ll risk saying that we’ll see a rebound for the dollar from 8.0400-8.0650 this week. Trading on the rebound is risky. If Brent breaks the 54.14 mark, it’s worth staving off dollar purchases. Wait for a fall in the dollar rate to the trend line and then keep an eye on how the price behaves.
Last week the USD/NOK fell by 5.75% to 8.0832. In just two weeks, the sellers managed to cover the upward wave from 8.0413 to 8.6000. The USD’s position is not looking so peachy anymore, so market participants’ expectations of a Federal Reserve rate rise in this year have died down. The Norwegian Krona, on the other hand, is up due to an increase in oil prices.
What’s interesting at the moment?
The USD/NOK is at 1450 points off the trend line. The line has been made between the 6.1317 and 7.2885 minimums.
The dollar’s fall stopped at the support zone. Whether you call it a head or spike, it’s clear to see that it has formed pretty well. In ideal circumstances, we now need to see a dollar consolidation at 8.0400 to 8.25, but it might go another way. Due to a dollar correction throughout the market, the USD/NOK could split in an instant and drop below the trend line.
Oil is gathering pace. On Friday the Baker Hughes report came out in which we could see that the number of extraction rigs in the week ending 9th October was down by 14 to 795. In terms for the year, this is a fall of 1135. The number of oil rigs fell by 9 to 605 and the number of gas rigs fell by 6 to 189.
Oil prices hardly flinched at the reports that were out before the weekend, so it’s worth expecting a growth for the quotes on Monday. Due to this, I’m going for a fall in the USD/NOK to 10th July’s minimum of 7.9393. If the pair manages to hold above 8.0400 on Monday, we could see a rebound to 8.1895 and then to 8.25.
FOREX TRADE IDEA:
- BUY: 8.0800.
- TAKE PROFIT: 8.25.
- STOP LOSS: 8.024.