Trading opportunities on currency pair: Since 17th March Brent oil has gone up 21% to 63.54. The rate of the Norwegian krona has returned to the trend line at 7.7144. Between the prices of oil and the USD/NOK pair, a negative correction is being preserved. If the price of oil rebounds, the krona will strengthen. Upon further growth in the price of oil a break of the line can be expected and a fall for the USD/NOK to 7.3859. The scenario for a reduction will cease to be valid if the rate exceeds 8.0050.
The USD/NOK rate has broken the lower limit of its triangle and dropped to 7.4537. The dollar hasn’t reached the 23.6% level. The pair switched to a sideways trend for 14 days and, after Brent quotes dropped to 52.55 from 62.75, the dollar rate strengthened against the Norwegian krona to 8.4178.
Norway is the second largest net exporter of gas and is 6th with regards to oil exportation. Norway’s budget revenue is dependent on oil prices. Between the prices on oil and the USD/NOK pair a negative correction is being preserved. If the price of oil rebounds, the krona will strengthen.
Oil is going up again. The currencies of exporters have strengthened against the American dollar. Since 17th March Brent has become 21% more expensive, to 63.54. The rate of the Norwegian krona has returned to 7.7144.
The determining characteristic for the growth in oil prices is the reduction in operating shale and oil rigs in the US. According to data from Baker Hughes, the number of rigs in the country lessened by 34, or 3.44%, on the week ending 17th April. The number now stands at 954. This is 877 less than in April 2014.
Due to the growth in oil prices, the USD/NOK has returned to the trend line which took its beginnings in August 2014. Brent oil at the current price model has gained traction and the potential to grow to 72.65 by the middle of May. In case of such turn of events, the trend line will be broken and the fall of the dollar will continue to 7.38: to the lower limit of the corridor. The corridor is made up of three points: 8.4187-8.1563-7.727.
If the USD/NOK rate rebounds and 8.0050 will be broken, it will start to have a W shaped pattern with an 8.41 target.
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