GBP/NOK has been oscillating within a short-term range since Tuesday, between 10.7700 and 10.8300. In the bigger picture, it’s been trading above the prior downside resistance line drawn from the high of May 5th, as well as above a newly established upside support line taken from the low of July 16th. So, having all these technical signs in mind, we will adopt a cautiously-bullish stance for now.
At the time of writing, the rate is trying to overcome the 10.8300 barrier, which is the upper end of the aforementioned short-term range. However, in order to get confident on more upside extensions, we prefer to wait for a break above the 10.8600 zone, which provided strong resistance on June 25th and 28th, as well as on July 1st. Such a move could set the stage for advances towards the 10.9200 area, marked by the inside swing low of June 18th, the break of which may allow the bulls to put the 10.9600 zone on their radars.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from slightly above its 50 line, while the MACD lies within its positive zone, and although below its trigger line, it shows signs it could turn up as well. These indicators suggest that the rate may have started picking up upside speed which supports the notion for some more near-term advances.
In order to start examining whether the bulls have abandoned the battlefield, we would like to see a clear dip below 10.7700. This will drive the pair below the upside support line drawn from the low of July 16th and may initially aim for the 10.7400 hurdle. If that zone fails to halt the slide, then we may experience downside extensions towards the 10.6900 territory, which supported the rate between July 18th and 22nd.
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