USD/NOK rises to multi-month highs amid USD strength

USD/NOK rose to a high of 11.215, its highest since late May and then settled at 11.191.
Nordea analysts point out that higher US yields are playing a big role in the upward movements of the pair.
The focus shifts to high-tier economic data from the US on Thursday and Friday.
The ECB decision on Thursday will also we closely watched.

Patricio Martín FXStreet

On Wednesday, the USD/NOK jumped to a daily high of around 11.215, its highest since May 31, and since last Friday, the pair has increased by more than 1%. Higher US treasury yields and firm economic activity figures from its local economy benefit the US Dollar over the NOK.

In line with that, S&P Global Manufacturing and Services PMIs from the US came in better than expected on Tuesday while the Eurozone indexes disappointed, suggesting that in the current cycle of global financial tightening, the US economy seems to be the last man standing. In addition, the 2,5 and 10-year yields are trading in multi-year highs at 5.10%,4.91 and 4.95%, respectively. Nordea analyst pointed out that rising yields are weighing on equities, which made Norwegian pension managers need to reduce FX hedges by selling NOK. They also claimed that higher energy prices and geopolitical tensions also made the Norgewian currency struggle to find demand.

Focus now shifts to the European Central Bank (ECB) decision on Thursday, where markets are not discounting any rate hikes. Still, Christine Largarde’s press conference will be important for the economic outlook of the European continent. In the same session, the US will release Gross Domestic Product (GDP) preliminary estimates from Q3 and Personal Consumption Expenditures (PCE) figures from September on Friday.

USD/NOK Levels to watch

With both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) comfortably placed in positive territory on the daily chart, the USD/NOK buyers hold the upperhand. However, both indicators approached overbought conditions which could fuel a technical correction in the upcoming session as the pair rose in the last four days.

Furthermore, the pair is above the 20,100,200-day Simple Moving Average (SMAs), suggesting that the bears are struggling to challenge the overall bullish trend.

Support levels: 11.095, 11.020, 10.945 (20-day SMA),

Resistance levels: 11.167, 11.215, 11.300.

USD/NOK Daily Chart

USD/NOK

Overview
Today last price	11.1877
Today Daily Change	0.0182
Today Daily Change %	0.16
Today daily open	11.1695

Trends
Daily SMA20	10.9236
Daily SMA50	10.7863
Daily SMA100	10.6124
Daily SMA200	10.5512

Levels
Previous Daily High	11.1985
Previous Daily Low	11.0206
Previous Weekly High	11.1145
Previous Weekly Low	10.9048
Previous Monthly High	10.8758
Previous Monthly Low	10.5261
Daily Fibonacci 38.2%	11.1306
Daily Fibonacci 61.8%	11.0886
Daily Pivot Point S1	11.0606
Daily Pivot Point S2	10.9516
Daily Pivot Point S3	10.8827
Daily Pivot Point R1	11.2385
Daily Pivot Point R2	11.3074
Daily Pivot Point R3	11.4164

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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