By IFCMarkets
Preparing for the meeting of the central bank of Norway
The next meeting of the central bank of Norway (Norges bank) will be held on March 21, 2019. Is there a possibility for the Norwegian krone to strengthen?
On the USDNOK chart, it looks like a downward movement. Market participants expect a rate hike by the Norwegian central bank amid high inflation of 3% in February of the current year. Since June 2018, it has exceeded the target level of 2.5%. Let us note that Norges Bank, for the first time in the last 7 years, announced a possible rate hike in March 2019 from 0.75% to 1% at its October meeting last year. By the end of 2019, the rate can be once again raised to 1.25%. This is a positive factor for the Norwegian krone exchange rate.
On the daily timeframe, USDNOK: D1 approached the support trend of the rising trend. Before opening a sell position, it should be breached down. Most technical analysis indicators formed sell signals. A downward movement may be formed in case of a rate hike by the Norwegian Central Bank and negative data in the US.
The bearish momentum may develop in case USDNOK falls below is last fractal low and the lower Bollinger band at 8.5. This level may serve as an entry point. The initial stop loss may be placed above the last fractal high, the Parabolic signal and the upper Bollinger band at 8.82. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level (8.82) without reaching the order (8.5), we recommend to close the position: the market sustains internal changes that were not taken into account.
| Position | Sell |
| Sell stop | Below 8.5 |
| Stop loss | Above 8.82 |
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