EUR/NOK spiked higher today, breaking above Friday’s peak, which is at around 10.220. Overall, the pair is printing higher highs and higher lows above a steep uptrend line drawn from the low of January 24th and thus, we would consider the short-term outlook to be positive for now.
At the time of writing, the rate is trading slightly below the 10.280 zone, defined as a resistance by the highs of October 30th and 31st. If the bulls are strong enough to overcome that hurdle, then we could see them aiming for the pair’s record peak, at around 10.315, hit on October 29th. They may decide to take a break after hitting that barrier, thereby allowing the rate to correct lower. However, if they jump back into the action from above the aforementioned steep upside line, we may see them bypassing the 10.315 barrier and entering unchartered territories. The next resistance zones may be formed near the psychological levels of 10.350 or 10.400.
Taking a look at our short-term momentum studies, we see that the RSI turned up and poked its nose back above its 70 line, while the MACD stands well above its zero line, and slightly above its trigger. Both indicators detect strong upside speed and support the notion for EUR/NOK to drift slightly higher, at least until it tests its all-time high.
On the downside, we would like to see a clear and decisive dip below 10.173 before we start examining the case of a bearish trend reversal. Such a move would confirm the break below the upside line and may initially pave the way towards Friday’s low, at around 10.112. Another break, below 10.112, could extend the decline, perhaps towards the 10.036 area, defined as a support by the low January 29th.
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