USDNOK closes below its opening price unable to hold early session gains
US Dollar/Norwegian Krone (USDNOK) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDNOK finished Wednesday at 9.0216 losing 71 pips (-0.08%). Trading 306 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDNOK as at Sep 16, 2020):
Wednesday's trading range has been 891 pips (0.99%), that's below the last trading month's daily average range of 1284 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDNOK. Prices continued to consolidate within a tight trading range between 8.9271 and 9.0982 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After spiking up to 9.0590 during the day, the currency found resistance at the 50-day moving average at 9.0490. The last time this happened on January 23rd, USDNOK actually gained 0.57% on the following trading day. The market found buyers again today around 8.9699 for the third trading day in a row after having found demand at 8.9886 in the previous session and at 8.9841 two days ago.
Although USD/NOK is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for USD/NOK. Out of 85 times, USDNOK closed higher 57.65% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.82% with an average market move of 0.86%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more