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USDNOK

Norway's Q2 to Q3 ratioThe pair will continue to move lower in the following days towards its October 2018 low. Norway has the highest Q2 to Q3 ratio among countries in Europe. The country managed to expand by 4.6% in the third quarter, almost completely recouping the 4.7% contraction in the second quarter. In addition to this, the country had a trade surplus of $2.7 billion in October compared to the -$8.0 billion deficit back in September. Investors’ confidence in Norway is also expected to boost the krone. The optimism was due to the record-breaking increase of the country’s sovereign wealth fund at $1.2 trillion. The increase in SWF was due to the recent tech rally in the US on which the oil fund has a substantial interest. Globally, the country owns 1.3% of global stocks. Also, the increase in the pension fund translates to higher liquidity, which could keep the economy and its currency afloat. In fact, the withdrawal made in May on the fund was exceeded by its capital gains.
Short
by Financebroker
FX Update: Final FX thoughts ahead of the US Election Night.Summary: The market seems to be putting on the reflationary trade today ahead of the uncertainties of the US Election as the USD and JPY wilt, while the AUD rushes higher after brushing off the well flagged easing moves from the RBA overnight. Any strong turn-out among Democrats could support an extension of this development, while a contested election scenario would very likely do the opposite. Today’s FX Trading focus: Market putting on reflation trade for Blue Wave scenario today The market seems to be moving in favour of a Blue Wave scenario this morning, with the USD and JPY offered and commodity currencies generally bid, together with risk sentiment. AUD managing to rise back above 0.7100 is particularly impressive and shows how thoroughly the RBA easing overnight was fully priced in. I generally agree with the consensus that a strong Democratic showing is a boost for the USD bears and especially commodity and EM FX on the prospects for a torrent of further stimulus next year that will not be offset with a big tax overhaul focus in the initial stages (counterproductive for the growth narrative), although the longer term risk of progressive adjustments to the US tax code loom as a spectre. Massive fiscal deficits in a reflationary economy that is hopefully mostly or fully moving beyond the Covid-19 pandemic by spring could mean heady moves in FX between now and next summer, if this view is correct. Such an outcome would favour positioning in upside optionality in AUDUSD call options for 3-6 months with additional spot trades if we see a Blue Wave outcome and the market reaction is supportive. The wild card for me in the above that has me sitting slightly uncomfortably is the long end of the US yield curve and bets on a steepening there – the speculative market there seems long the 10 years and very short the 30-year T-bond. Is this a Fed yield-curve-control bet on the anticipation of exploding US yields on a Blue Wave outcome, or any outcome eventually? Certainly, the long-term weak US dollar argument is that US inflation will rise far faster than the Fed will make any adjustments to its policy rate under its new “flexible average inflation targeting” regime. And eventually, the Fed could super-charge USD weakness if it does decide to cap yields out to 10 years, for example if it fears that the rising yields are dampening the prospects for further improvements in the labour market. But for now, I’m curious if some kind of reversal of what seems a crowded trade is a risk and whether this has any implications for the US dollar as well. The scenario market participants don’t want to see As I have underlined nearly everywhere in my commentary on the US Election, the market fears most that this election will see a contested outcome in which the losing side refuses to concede and as I noted yesterday, the worst of worlds is the Murphy’s Law outcome in which the state of Pennsylvania is the deciding margin in the electoral college. So despite a clear general lean in favour of a Democratic Blue Wave of sufficient magnitude to at least see the Democrats take marginal control of the Senate in addition to winning the presidency, there are plenty of market participants who are uncertain and who believe otherwise, so two-way risks are prominent on this election outcome. But really, few are well prepared for an ugly, contested election scenario if the vote proves close and the uncertainty drags out for days and weeks. In a contested election scenario, watch for hefty yield curve flattening in the US, a possible USD spike, but a very likely strong JPY spike and then ugly volatility in some of the currencies best positioned for the reflationary narrative, from commodity currencies to EM. Chart: USDNOK weekly Here is a currency pair on the major fault-line going into the Election result tonight – the US dollar versus the Norwegian krone. The US dollar outlook is heavily dependent on whether the negative US real rates (inflation running hot and far beyond the policy rate) story pans out next year and beyond in a Blue Wave election outcome (or even if Trump wins, really – but that realization would take far longer. The NOK outlook is reliant on the reflation narrative generally, on the oil market re-discovering its supply vs. demand balancing point, and linked to that on a global- and especially EU outlook improvement beyond the Covid-19 disaster. The pair has twice found resistance just above 9.50 and not far from the 200-day (40-week) moving average – and all USD/commodity currency and USD/EM pairs will be interesting to watch in the days after the election result. A weaker USD world and recovery in oil prices could have the pair trading close to 8.00 or lower by late next year. John Hardy Head of FX Strategy Disclaimer The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. 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Editors' picks
by Saxo
3
U.S. Dollar/Norwegian Krone Mark UpThe market is at the low end of the curve of where price action is currently trading. I'm bullish on this pair, but I'll be even more bullish after there's a B.A.R. of the $9.8120. However, that may not happen for awhile unless there's some big news drop that'll help propel price to higher levels, but I would be anticipating some more bear action to assist in pushing price further down within that huge O.B that's currently underneath price. If you look to the left of the chart within the EQ you'll notice all of those green candles which signifies potential profit margin to the downside. Price action has already moved more than 50% to the downside in correlation to the potential profit margin I just mentioned so I would wait for that zone ($8.6568-$9.1003) to be hit for any type of bullish trades. If the bears end up dominating I would just wait for a B.A.R. of the $8.6568 level. The only issue with that is the fact that the zone is massive so if it doesn't hold you can execute certain positions within it in correlation to YOUR trading rules. I've been recently seeing this currency pair brought up in the trading community which prompted me to do an analysis to see how it plays out. We shall see.. Also, if my analysis help YOU in any way, shape or form then please consider donating to the cause. It's appreciated.
by ChrisJTradesFX
Proposed Long USDNOK (trend continuation)Take a look at the daily chart too. After the massive bear trend, since Sep we have been mostly bullish. As the H4 chart shows, a retracement to 38.2% was completed and I expect the bull trend to resume. The recent high at about 9.61 should be the 1st target, with a review of price action to determine the next possible steps. If you like my analysis, please give it a "thumbs up" and follow me to get immediate notifications. As always, please use sound money and risk management in all your trades.
Long
by Trading_Vista
USD/SEK and EUR/SEK Breakout Trades!USDNOK has been one of my favourite Dollar pairs I have kept tabs on ever since the DXY was showing signs of a reversal. This market structure analysis can be used for ANY MARKET since ALL MARKETS move the same three ways. USDNOK was in a long downtrend with multiple lower highs and lower lows. Price then began to base/range/consolidate. This was a sign that the downtrend was over or was exhausting as no new lower lows were being made. Scrolling back, price did find support at an important support/flip zone of 8.60. The trigger for an entry is the breakout. We wanted a nice clean and strong breakout. This occurred with today's daily candle. Placing my stop loss just below the daily candle, and targeting the 9.20 zone. A good risk vs reward set up. EURSEK is very similar. A lot of market structure confluences. We have had the break out too. Notice the large sell off and buyers stepping in on the retest already. Similar approach: A stop loss below the daily breakout, and targeting the 10.55 zone. As a bonus, I was watching USDNOK too. We had a nice long downtrend with multiple swings, which hit a large support/flip zone at 8.70. From here, I was watching for an inverse head and shoulders reversal pattern. Unfortunately, we did not get that. BUT we did get a close above the previous lower high (9.0355) zone meaning the downtrend is officially over. What I would like to see now is our first HIGHER LOW in this new uptrend, and this will provide us with an opportunity to enter, and we can place our stop loss below this higher low. Ideally, we would like this higher low to be formed with a retest of the breakout zone.
Long
by Uncharted-FX
Two scenarios on USDNOK by ThinkingAntsOkMain items we can see on the chart: a) The major structure we can see is a Daily Ascending channel b) Currently, the price is on the lower trendline of the channel + major support resistance zone / That provides us with a strong level c) Now we have to pay attention either for a reversal movement or a continuation one d) We have established those 2 zones one for the bullish and one for the bearish direction. The idea is not to trade directly but to wait for the adequate corrective structures
by ThinkingAntsOk
1