USDNOK
USDNOK makes a second attempt today to break above the 200-day moving average support. Yesterday the pair managed to pierce that resistance but sellers stepped in and pushed the pair back below 9.5176.
Economic uncertainty continues to favour the USD. The rising number of new coronavirus infections has already halted the recent economic recovery in the northern hemisphere.
Norges Bank yesterday left the interest rates unchanged at 0% as widely expected by markets. The central bank will keep the rate at current levels over a couple of years, and we might see gradual higher rates as the economic activity returns to normal levels. The interest rates path now indicates that there is 40% probability for 25 basis points hike in the 2Q of 2022, while the likelihood rises to 70% for a rate hike in the third quarter of 2022.
Norges Bank now expects a GDP contraction of 3.6% in 2020, and a growth of 3.7% in 2021 and 2.7% in 2022. The bank also projects that inflation will rise 3.4% this year and 2.3% in 2021.
USDNOK is 0.91% higher at 9.5652 the highest level since July 2. The pair managed to rebound fast from 12-month lows on September 1 and crushed the significant resistance levels the last seven trading sessions.
The move in USDNOK today breached the 200-day moving average, and if the pair settles above that resistance, then we might see another leg higher targeting 6.6454 the high from July 1. The next hurdle for the pair would be met at 9.7706 the top from June 30.
On the contrary, support for the USDNOK cross stands at 9.5092 the 200-day moving average. The low from yesterday at 9.4498 would provide the next support area. If the pair breaks below, then the crucial support is at 9.3343 the 100-day moving average.
