EURNOK - Make it or break it. Hesitation at the crossroads
Well, this week or the next we should see the fate of NOK. Actually I think this week Norges Bank will determine the fate of their ccy. EURNOK got very close to a major inflection point. A make it or break it time is ahead of the pair.
Weekly:
- Price has reached a multiple support/resistance zone: bullish trendline, Kumo, 100 WMA, and horizontal key supp/res area is below the Price. Chikou Span hits past candles. This is a very strong resistance now, so if by any reason Price breaks it finally, the selling will be dramatic.
- Heikin Ashi candles: last week candle is interesting as it had a lower wick, but finally an inside body. This means by the end of last week the selling pressure has eased a lot. Therefor haDelta/SMA3 crossed up (still below zero line).
This week's candle has very little information so far.
Daily:
- Price started some wider range consolidation below bearish supports. It is still trading below Kijun Sen after it has tested the 26 days average twice. It looks like in short term the 9,53-9,57 area is a strong support, but 8,35-8,40 is also a strong resistance (not surprsing looking at the weekly chart's crossroads there)
- Heikin Ashi signal right now suggests Price will try to dip again a bit, but for a sustainable bearish move it should have a stronger bearish momentum.
The thing is simple now. Based on the daily chart setup, it is better risk reward to sell the range top and size shorts up a bit below 8,43, then trail your stops. It is a good strategy unless Norges Bank joins the global CB idiotism and starts to cut base rate, as in that case EURNOK would spike up above 8,55 and 8,61, which would be a bullish reversal for the pair. Please note that 8,61 is also the weekly Tenkan Sen, so that level would trigger a lot of buying.
If Norges Bank realises what European bond investors have already started to realise (that is the pricing out of the global long term deflation fears and trades), then they will not be idiot to act behind the curve and they will leave the base rate unchanged.
Weekly:
- Price has reached a multiple support/resistance zone: bullish trendline, Kumo, 100 WMA, and horizontal key supp/res area is below the Price. Chikou Span hits past candles. This is a very strong resistance now, so if by any reason Price breaks it finally, the selling will be dramatic.
- Heikin Ashi candles: last week candle is interesting as it had a lower wick, but finally an inside body. This means by the end of last week the selling pressure has eased a lot. Therefor haDelta/SMA3 crossed up (still below zero line).
This week's candle has very little information so far.
Daily:
- Price started some wider range consolidation below bearish supports. It is still trading below Kijun Sen after it has tested the 26 days average twice. It looks like in short term the 9,53-9,57 area is a strong support, but 8,35-8,40 is also a strong resistance (not surprsing looking at the weekly chart's crossroads there)
- Heikin Ashi signal right now suggests Price will try to dip again a bit, but for a sustainable bearish move it should have a stronger bearish momentum.
The thing is simple now. Based on the daily chart setup, it is better risk reward to sell the range top and size shorts up a bit below 8,43, then trail your stops. It is a good strategy unless Norges Bank joins the global CB idiotism and starts to cut base rate, as in that case EURNOK would spike up above 8,55 and 8,61, which would be a bullish reversal for the pair. Please note that 8,61 is also the weekly Tenkan Sen, so that level would trigger a lot of buying.
If Norges Bank realises what European bond investors have already started to realise (that is the pricing out of the global long term deflation fears and trades), then they will not be idiot to act behind the curve and they will leave the base rate unchanged.
