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Short-term Trading Idea FX USD/NOK – Bear Speculation: Expected Correctional Movement to 8.3310

Trading opportunities for currency pair: after a sharp growth due to Janet Yellen’s announcement, the USD/NOK is seeing a correction. If the dollar starts correcting against all the key pairs, we can set our first target at 8.3310.

Background:

The last idea I did on the USD/NOK came out on 24th September. After a break in the trend, the dollar was trading near the lower limit of the channel. In the idea I considered a weakening of the dollar to 7.8950 if pressure were to increase on the currency due to a strengthening of the price of oil. The USD/NOK fell to 8.0413 and rebounded upwards to 8.5734.

Current situation

The dollar was up on Thursday after Janet Yellen’s speech. The Fed chief left the possibility of putting up the US base rate open for this year.

What’s interesting at the moment?

On Friday the USD/NOK closed around 8.4936 after a renewal of the maximum. In this idea, I’m considering a fall of the dollar to 8.3310 as part of a correction. It’s unlikely to go lower, since oil is now going for $50 per barrel and Brent has been trading in a narrow range for the past 18 days.

Friday’s candle has a long tail. Its weakness is its bullish body. With this kind of candle, the rate could return to 8.5734 at some point today. If the USD/NOK closes Monday around 8.4440, it might be best to put a sell-stop order on. A strengthening of the sellers below 8.4187 will strengthen the dollar’s bearish mood on the market. Before selling dollars, keep an eye on the price of oil and other dollar pairs.

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