EUR/NOK traded lower yesterday, after it hit a new record high at around 10.3150. That said, the retreat was stopped near the 10.2450 zone, which is near the peak of October 18th. Overall, the pair has been printing higher highs and higher lows above an uptrend line since September 19th, and thus, we will maintain a positive stance for now.
The rate could continue correcting lower for a while more, perhaps falling below 10.2450. However, the bulls may be tempted to take charge again from near the 10.2000 zone or the aforementioned upside line and push the pair back above 10.2450. Something like that could allow them to aim for another test near the record peak of 10.3150, and if they are not willing to hit the brakes there this time around, a break higher would drive them into unchartered territories.
Looking at our short-term oscillators, we see that the RSI has topped slightly above 70 and then moved lower (although it just ticked up), while the MACD, although above both its zero and trigger lines, has topped as well and appears ready to cross below its trigger soon. Both indicators detect slowing upside speed, which supports our view that some further retreat may be in the works before the next positive leg.
Nevertheless, in order to start examining whether the bears have gained full control, at least in the near-term, we would like to see a decisive dip below 10.1250. Such a move would confirm a forthcoming lower low, with the rate already below the previously mentioned upside line. We may then experience declines towards the 10.0850 territory, which is marked by the inside swing highs of October 10th and 15th, the break of which may allow extensions towards the 10.0330 zone, marked by an intraday swing low formed on October 14th.
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