NOK/SEK traded lower on Friday, after it hit resistance near 1.0515 on Thursday. That said, the rate continues to print higher highs and higher lows above the uptrend line drawn from the low of December 12th and thus, we would consider the short-term outlook to be positive for now.
The current setback may continue for a while more and perhaps challenge the 1.0463 support zone, or even the aforementioned upside line. The bulls may take charge from there and push up for another test near the 1.0515 area. That said, in order to get confident on larger upside extensions, we would like to see a decisive break above the 1.0530 resistance level, marked by the high of November 22nd. Such a break may pave the way towards the 1.0560 zone marked by the high of the day before.
Taking a look at our short-term oscillators, we see that the RSI exited its above-70 zone and now points to the downside, while the MACD, although positive, lies below its trigger line, pointing south as well. Both indicators suggest that the strong upside momentum is fading, thereby supporting the notion for some further retreat before, and if, the bulls decide to shoot again.
Nevertheless, in order to start examining the bearish case, we would like to see a clear dip below 1.0435, which is yesterday’s low. The rate would already be below the pre-mentioned upside line and thus, the bears may be encouraged to drive the battle down, towards the 1.0390 zone, defined by an intraday swing low formed on Wednesday. Another dip, below 1.0390, could extend the slide towards Tuesday’s low, near 1.0365.
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