USDNOK advances to monthly highs as crude oil price slumps to three-month lows. Global growth worries rise as coronavirus spread have a significant impact on the consumption, transportation and the demand for crude oil. Norwegian Krone feels the pressure as the crude oil is the main export of the Norwegian economy. Risk-off also weigh on NOK as investors move to safe-haven assets.
The previous week, Norges Bank kept benchmark interest rates unchanged as was expected by markets at 1.5%.
The Norwegian central bank reiterated that uncertainties surrounding global developments persist while the Inflation is close to target. The capacity utilisation in the economy is above the average level. The balance of risks suggests that the policy rate will likely stay at the current level in the upcoming months.
Read our Best Trading Ideas for 2020.
USDNOK trades 0.78% higher at 9.1121 as the rally that started in early 2020 has accelerated after the pair breached above the 100-day moving average in the early European session. The USDNOK technical outlook is bullish now as the pair breached the critical 100-day moving average resistance.
On the upside immediate resistance now stands at 9.1126 the daily high. A settlement above that level today will open the way for the next resistance at 9.1761 the high from December 11th. Next barrier to the upside will be met at 9.7196 the high from November 29th.
On the flip side initial support will be met at 9.0394 the daily low. If USDNOK breaks below, the next target on the downside is at 9.0075 the 50-day moving average. More bids would emerge at 8.9188 the low from January 21st.