- USD/NOK fell to 10.887, with losses of 1.70%.
- Weak US inflation figures fueled risk appetite on flows.
- Markets are betting on a more dovish Federal Reserve.
- Retail sales and PPI in the United States will be reported on Wednesday.
On Tuesday, USD/NOK faced strong selling pressure, reaching 10,880 and posting losses of 1.70%. Weakness in the US dollar boosted the pair following the release of US October inflation figures, which were weaker than expected.
According to the official report of the US Bureau of Labor Statistics, the monthly Consumer Price Index (CPI) remained unchanged, while it experienced a year-on-year increase of 3.2%. The underlying index stood at 4% year-on-year, slightly below the previous 4.1%. After reporting weak non-agricultural payrolls in early November, these figures reduced the likelihood of a further interest rate hike by the Federal Reserve (Fed), immediately triggering a risk-on sentiment in the financial markets.
The question now is how long the Fed will keep rates at restrictive levels, and in the meantime, markets are betting on rate cuts in May 2024. On Wednesday, the US will report on the Producer Price Index (PPI) and October retail sales, which will likely give more clues about the Fed’s plans.
USD/NOK levels to watch
On the daily chart, the USD/NOK pair presents a bearish technical picture, as indicators show signs that sellers are gaining ground, after the pair fell more than 3% since last Friday. The Relative Strength Index (RSI) shows a negative slope in the bearish zone, while the moving average convergence histogram (MACD) shows ascending red bars.
Assessing the technical picture on a larger scale, the pair is also below the 20-day and 200-day SMA, but above the 100-day SMA, indicating that the bulls still maintain some dominance over the bears over the longer time horizon, even though the sellers are in charge in the short term.
Supports: 10,881, 10,850, 10,775.
Resistances: 11,000, 11,030, 11,119 (20-day SMA).
USD/NOK daily chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
