- Summary:
- The USDNOK is down 1% on the day as the Norwegian Krone benefits from rising crude oil price action on the WTI and Brent benchmarks.
The Norwegian Krone is benefitting from today’s surge in the price of crude oil. Crude oil prices surged 25% on the day after US President Donald Trump said he expects Saudi Arabia and Russia to cut oil production by 10-15 million barrels per day. These comments drove risk-on sentiment on the day and drove down the USDNOK by just under 1% to 10.34920.
The USDNOK has given up a lot of the gains it made on its way to record highs when crude oil price tumbled overnight at the onset of the price war launched by the Saudis against Russia. As Saudi Arabia has now called for an urgent meeting between the OPEC bloc and non-OPEC allies (according to Reuters), analysts will now watch to see if the present spike can be maintained.
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Technical Outlook for USDNOK
The retreat of the USDNOK has stalled at the 61.8% Fibonacci price level from the swing lows of March 9 to the swing highs of March 19 2020. The spike in crude oil price needs to be sustained to maintain the downward trajectory on this pair. If the markets digest President Trump’s comments and feel they do not carry too much weight in the long run, this may cool the run of the Norwegian Krone and allow the USDNOK to resume the uptrend with a bounce from the support at 10.32158. Such a bounce would target the 50% Fibo retracement level at 10.65769, which is also the high of March 30.
On the flip side, the continuation of the pullback would extend the drop to the 9.84305 price level, which is where the 78.6% Fibonacci price level and the low of March 13 is found. Below this area, the February 28 high at 9.48835 may serve as another support target.