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USDNOK: How Far Will the Kroner Correction Go?

USDNOK
USDNOK

The USDNOK surrendered early gains to trade unchanged after the Non Farm Payrolls report was unable to shake uncertainty over President Trump. The NFP report showed the U.S. economy was able to add 667k jobs versus the 850k expected, but the unemployment rate was still lower at 7.9%.

The U.S. dollar has been under pressure against global currencies after President Trump and the First Lady tested positive for the coronavirus. The news rattled markets with the election just a month away and the hopes for a further stimulus package could also be impacted.

A late bounce in the price of crude oil could have helped the Kroner, yet the price of crude is down 2.9% on the day at $37.40 after losing the $40.00 level this week. Crude has been losing ground over fears that the increase in virus cases would lead to further restrictions and lower oil demand.   

The economic calendar is light for the U.S. and Norway next week but we will get a release of FOMC minutes on Wednesday. Until then traders will focus on President Trump’s health and the chance for further stimulus, whilst crude oil will have to show whether it can reclaim the $40.00 level or fall further. Despite the weakening in oil prices, the Kroner will have potential to gain on safe haven flows if the election picture becomes uncertain.

USDNOK Technical Outlook

The USD pulled back for four-straight days before attempting a rally. The pair has bounced from the 38.2% fibonacci level and we have key support from a previous lowahead of the 50% retracement and the 50-day moving average also guards the 61.8% level. These will be the areas to watch and a close below 9.000 could see the USDNOK target the lows again. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.  

USDNOK Daily Chart