USD/NOK falls sharply to support at 5.967
The dollar traded unchanged or lower against the other G10 currencies during the European morning Wednesday with the only exception being JPY. The greenback depreciated against NOK, CHF, EUR and SEK, while it remained near its early morning levels against CAD, AUD, and GBP and NZD.
The main economic release we had today was Eurozone’s preliminary CPI data for April. The headline inflation rate rebounded by less than expected to +0.7% yoy from +0.5% yoy in March. The forecast was at +0.8%. The core CPI came out at +1.0% yoy as anticipated. EUR/USD declined approximately 20 pips at the time of the release but recovered and gained even more immediately to stand above its pre-announcement level. The initial decline may have triggered some buy orders slightly below the strong support zone of 1.3790, the lower boundary of the trading range the pair has traded in since the 14th of April. The uptick in inflation may not be as great as expected but still could ease pressure from the ECB to take steps in next week’s meeting to tackle low inflation.
The Norwegian Krone was the main gainer as Norway’s AKU unemployment rate for February remained unchanged at 3.5% and retail sales accelerated in March, beating market expectations.
The ruble was the main loser among the EM currencies we track as Russian President Putin said he might retaliate if further sanctions were imposed on the nation.
USD/NOK collapsed, breaking below the 5.9780 barrier, but the decline was halted by the support of 5.9670 (S1), near the 50% retracement level of the 10th – 25th Apr. short-term uptrend. A clear violation of that hurdle may pave the way towards the 5.9520 (S2) support, which coincides with the 61.8% retracement level of the aforementioned advance. The MACD fell below both its trigger and zero lines, confirming the aggressive bearish momentum of the rate. I would ignore the oversold RSI, since the fall was sharp and may continue, keeping the oscillator within its extreme zone for an extended period of time.
Support: 5.9670 (S1), 5.9520 (S2), 5.9400 (S3)
Resistance: 5.9780 (R1), 6.0100 (R2), 6.0200 (R3)
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.