EUR/NOK traded higher on Friday, breaking above the 10.00 zone, and specifically above the resistance (later turned into support) of 10.025, marked by the high of November 18th. Then, the rate hit resistance at 10.085, and pulled back to test the 10.025 zone as a support this time, before rebounding again. Overall, the rate remains above the upside support line drawn from the low of October 20th, which combined with the latest rally paint a positive near-term picture.
We would start examining further advances upon a break above the 10.107 territory, which is defined as a support by the inside swing low of September 30th. This would confirm another higher high and may initially pave the way toward the peak of October 1st, at 10.170. If the bulls are not willing to stop there and eventually break higher, then we could see the trend extending towards the peak of September 30th, at 10.225.
Looking at our short-term oscillators, we see that the RSI, already slightly below 70, has turned up again. It could emerge above 70 again soon. The MACD, on the other hand, lies slightly above both its zero and trigger lines, but has turned somewhat down. This makes us somewhat cautious that another setback may occur before the next leg north.
Now, in order to start examining whether the bears have gained the upper hand, we would like to see a dip below 9.840. This will also confirm the break below the upside support line taken from the low of October 20th, and may initially target the 9.790 zone, which provided resistance between October 28th and November 1st. If that barrier does not hold either, then we may experience declines towards the 9.710 territory, which is marked as a support by the low of October 28th.
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