NOK/SEK traded higher on Monday, after it hit support near the crossroads of the 1.0612 level and the upside support line drawn from the low of December 12th. That said, the recovery was stopped by the 1.0690 zone, marked as a resistance by Friday’s high. Overall, as long as the pair continues to print higher peaks and higher troughs above the aforementioned upside line, we would consider the near-term outlook to be positive.
Nonetheless, a break above 1.0690 is needed to confirm a forthcoming higher high, something that could initially pave the way towards the 1.0720 hurdle, defined by the inside swing low of October 15th. Another break, above 1.0720, could extend the advance towards the peak of the next day, at around 1.0750.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 50 line and now looks to be heading towards 70, while the MACD, even though below its trigger line, stands positive and appears ready to move back above its trigger. Both indicators suggest positive momentum and support the notion for this exchange rate to continue drifting north for a while more.
In order to start examining a bearish reversal, we would like to see a decisive dip below 1.0612. Such a dip would not only confirm the break of the pre-mentioned uptrend line, but would also confirm a forthcoming lower low on the 4-hour chart. The bears may then drive the battle towards the 1.0580 zone, marked by the low of December 31st, the break of which may extend the slide towards the low of the day before, at around 1.0550.
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