USD/NOK traded lower on Wednesday, after hitting resistance slightly below the 8.8975 barrier, which is the upper bound of the sideways range that’s been in play since December 22nd. Although the pair shows signs that it could drift further south, we would like to see it breaking below 8.7590, the lower end of the range, before we start examining the bearish case.
Such a dip would confirm a forthcoming lower low on the daily chart and pay pave the way towards the low of November 17th, at 8.7000. If the bears do not stop there, we may experience extensions towards the low of November 15th, at 8.6380, or the 8.6000 zone, marked by the inside swing high of November 5th. Slightly lower lies the 8.5700 area, which is the inside swing high of November 8th.
Taking a look at our short-term oscillators, we see that the RSI turned down and crossed below its 50 line, while the MACD, although fractionally positive, lies below its trigger line and points down. Those indicators suggest that the rate has gathered, or will soon start to gather, downside speed something increasing the chances for further declines.
We will start examining whether the bulls have stolen the bears’ swords if we see a break above 8.8975. This would confirm a forthcoming higher high and may see scope for advances towards the high of December 22nd, at 8.9735. Another break, above 9.0690, could set the stage for extensions towards the 9.0690 zone, which is slightly above the high of December 21st.
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