EUR/NOK has been trading in a consolidative manner since Thursday, in the middle of the range between the 9.639 and 9.780 barriers, marked by the low and the high of Wednesday. Overall though, the pair continues to trade below the downside resistance line taken from the high of August 20th, and thus, we will maintain a negative stance with regards to the near-term outlook.
However, in order, to start examining a trend continuation, we would like to see a dip below 9.639. This will confirm a forthcoming lower low on both the 4-hour and daily charts and could initially pave the way towards the 9.554 zone, marked by the low of April 22nd, 2019. If the bears are not willing to stop there either, we could see larger downside extensions, perhaps towards the low of October 16th, 2018, at around 9.417.
Shifting attention to our short-term oscillators, we see that the RSI lies flat fractionally below its 50 line, while the MACD, although negative, is still slightly above its trigger line. Both oscillators suggest that the rate is running out of downside speed, which enhances our choice of waiting for a dip below 9.639 before we get more confident to the downside.
In order to abandon the bearish case, we would like to see a recovery back above the 9.968 barrier, marked by the high of October 7th. Such a move could signal a break above the downside line taken from the high of August 20th and may encourage the bulls to aim for the 10.040 zone, marked by the high of October 4th. Another break, above 10.040, could target the inside swing low of September 30th, at 10.107, the break of which could allow extensions towards the peak of September 30th, at 10.225.
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