USD/NOK faces a steep decline after Norges Bank and Fed’s decision


  • The USD/NOK experienced a 2.35% downslide, trading close to the 10.520 level.
  • Norges Bank increases benchmark interest rate by 25 bps to 4.50%
  • US bond yields decline across the board after the Fed hinted a more easing than expected in 2024.

In Thursday's session, the USD/NOK pair took a downward tumble, plunging to its lowest level since August at about 10.520. This move was spurred by the decisions from higher-tier financial institutions, specifically Norges Bank and the Federal Reserve, which fueled a substantial 2.35% decline but mainly due to the Norwegian taking on an unexpected hike.

In line with that, Norges Bank announced a 25 bps in the policy rate, bringing it up to 4.50%, and suggested a potential halt of their rising rate cycle, as the terminal rate projections were slightly upped to 4.55% from 4.44%, in sync with previous forecasts and showing the little possibility of more hikes.

Despite the market and economists' low expectations, Norges Bank enforced the hike but it also changed its tone, exhibiting concern over the risks between over-tightening and under-tightening, hinting at a reduced inclination towards future hikes.

On the other hand, the Fed left rates steady at 5.25-5.50% as expected the official's median projections suggest that they expect 75 bps of easing in 2024. As a reaction, markets dumped the US Dollar, also driven by the bank’s hints of low odds of additional tightening, also fuelling the pair downwards.

USD/NOK levels to watch

The daily chart suggests that the pair finds itself in a bearish landscape, as the Relative Strength Index (RSI) portrays a negative slope in the negative territory while the Moving Average Convergence Divergence (MACD) histogram further confirms this bearish bias, presenting rising red bars.

On a broader context, the pair is nestled below the 20,100 and 200-day Simple Moving Averages (SMAs), cementing the control of the sellers also in the larger context.


Support Levels: 10.450, 10.400, 10.350.
Resistance Levels: 10.570, 10.680 (200-day SMA), 10.700.


USD/NOK daily chart

 

USD/NOK

Overview
Today last price 10.5253
Today Daily Change -0.2606
Today Daily Change % -2.42
Today daily open 10.7859
 
Trends
Daily SMA20 10.8
Daily SMA50 10.9466
Daily SMA100 10.7696
Daily SMA200 10.6867
 
Levels
Previous Daily High 11.0114
Previous Daily Low 10.7586
Previous Weekly High 10.985
Previous Weekly Low 10.6562
Previous Monthly High 11.2519
Previous Monthly Low 10.581
Daily Fibonacci 38.2% 10.8552
Daily Fibonacci 61.8% 10.9148
Daily Pivot Point S1 10.6926
Daily Pivot Point S2 10.5992
Daily Pivot Point S3 10.4398
Daily Pivot Point R1 10.9453
Daily Pivot Point R2 11.1047
Daily Pivot Point R3 11.198

 

 

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