By Dan Eduard
Since early last week, the US dollar has been steadily dropping against its Norwegian counterpart. The USD/NOK pair has fallen close to 1300 pips since the 27th of December, largely due to the low volatility that existed in the marketplace around the Christmas holiday. It now appears that the pair may be due for a reversal, with technical indicators showing an impending bullish move is likely to occur.
We will be analyzing the daily chart for the USD/NOK pair, provided by Forexyard. We will be looking at the Stochastic Slow, Williams Percent Range and Relative Strength Index (RSI).
1. As we can see, the Stochastic Slow has formed a bullish cross. This is typically a solid sign that the pair is in oversold territory, and an upward correction is likely to take place.
2. When analyzing the Williams Percent Range, we typically view the -80 and -20 levels as the borders for the instrument being in oversold and overbought territory, respectively. As we can see, the indicator is just below the -80 level, meaning the USD/NOK is likely oversold and may see bullish movement.
3. The RSI is currently right on the border of being in the oversold region. Traders will want to keep a close eye on this indicator. When it crosses the bottom support line, upward movement will likely follow.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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