USD/NOK rebounded yesterday, from near the uptrend line taken from the low of the 9th of July. The pair continued trading north today but hit resistance slightly below the 8.3850 barrier during the European morning and then, it retreated somewhat. In our view, as long as USD/NOK is trading above the aforementioned uptrend line, the near-term outlook remains positive.
We would expect the bulls to take charge again soon and aim for another test near 8.3850. If they prove strong enough to overcome that zone, then we may see them driving the battle towards our next resistance of 8.4450, defined by the peak of the 21st of August. However, before they decide to shoot again, we see the case for the current setback to continue for a while more, perhaps for a test near the crossroads of the 8.3150 level and the uptrend line.
The case for the pair to continue its current retreat is supported by both our short-term oscillators. The RSI lies above its 50 line but turned down today and now looks able to fall back below its equilibrium level. The MACD, although above its trigger line, shows signs that it could start topping slightly below zero.
Now, in order to start examining the case of a short-term reversal, we would like to see a clear dip below the 8.3150 barrier and the uptrend line drawn from the low of the 9th of July. Such a break is possible to initially aim for the 8.2700 support, marked by the inside swing peaks of the 19th of July and the 6th of August. Another break below 8.2700 could extend the slide towards our next support zone of 8.2350.
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