USD/NOK Nears Resistance, Watch for Breakout or Failure
Cory Mitchell, CMT
The USD/NOK is testing resistance between 9.20 and 9.3057 (October high), and currently consolidating there. This follows a sharp advance in January.
Watch the consolidation, so far between 9.29 and 9.1753 on the daily chart, for a breakout.
Over the longer-term, an upside breakout would see the long-term uptrend continue. The price target is just below 9.7. The trade can also be taken on shorter time frames, such as the 4-hour or hourly chart, and a trailing stop loss can be used to lock in gains (instead of a target) if the price rises.
If the consolidation is broken to the downside, the target zone is near 8.9. This is above the late 2019 swing low. As with the long trade, shorter-term trades can be taken on the 4-hour or hourly with a smaller target or a trailing stop loss.
A stop loss is placed just outside the consolidation on the opposite side from the breakout (assuming the daily chart is used).
For another similar type of trade, see USD/CAD at Top of Descending Wedge.
The NOK interest rate is 1.5% while the USD rate is 1.75%. This means short positions will pay a small amount of interest each night, while long positions should gain a small amount of interest (will vary by broker, as they take a cut).
A Competitive Advantage in Trading Can't Be Bought - Trading isn't just about strategy, it is the ability to adapt. Simply buying a strategy or robot won't produce profits over the long-term.
By Cory Mitchell, CMT. Join me on Twitter @corymitc.
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.