Chart of the Day: USDNOK
A simple chart that’s been passed around by traders this morning and getting good attention is USDNOK. The downside break of the 1.1107/2 support level in EURUSD has also garnered much attention. But I’ve looked at the NOK, as it was the weakest of the G10 FX currencies. Selling the weakest and buying the strongest sounds simplistic, but it's often a great place to start in FX trading.
I’ve written in-depth as to why the USD strengthened in today’s edition of the Daily Fix. Needless to say, however, USDNOK has broken out to the highest levels since January 2015. This is one for the breakout traders, and, of course, there’s a whole science to trading breakouts. How price acts and feels after the breakout is absolutely critical in determining if the move has further legs. Ideally, we want to see a retest of the former breakout high, with buyers stepping in to confirm this is now support. A subsequent move through the Fed-inspired USD move, and the pair should trend higher. That’s one for the radar.
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