USD/NOK edges lower on quiet Monday, ahead of US CPI – Crypto News – Crypto News
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USD/NOK retreats from multi-months highs as bulls take a breather USD/NOK retreats from multi-months highs as bulls take a breather

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USD/NOK edges lower on quiet Monday, ahead of US CPI – Crypto News

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1 year ago

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  • With the Norges Bank holding rates at 4.5% and suggesting a prolonged duration of stringent monetary policies, a bullish trend for the NOK is likely.
  • The Federal Reserve’s cautious remarks provided support to the Dollar lately.
  • Retail Sales and CPI data from the US this week will set the pace of the pair.

The USD/NOK pair saw a sharp decrease in Monday’s trading session, driven primarily by ongoing hawkish sentiment from the Norges Bank and a somewhat weak start of the week for the Greenback.

The Federal Reserve (Fed) made guarded comments that have boosted the Dollar last week. As for now, the possibility of a June rate cut dropped to 5% compared to 10% at the start of last week, whereas July’s odds fell to close to 25% from 40%, with a November adjustment remaining fully priced in. However, those odds will vary as the Fed has clearly stated that it remains data-dependant and this week’s Consumer Price Index (CPI) data from April as well as Retail Sales will be closely looked upon by investors.

On the NOK’s side, Norway’s central bank, Norges Bank, maintained its hawkish stance, keeping the interest rate at 4.5% and implying an extended duration of a strict monetary policy. This inclination, along with April’s Consumer Price Index (CPI) which showed a slight increase to an annual rate of 3.6% and an unexpected jump in the underlying inflation rate to 4.4%, has given rise to a bullish outlook for the NOK. Market participants only predict a 50 basis point cuts in the upcoming 12 months.

USD/NOK technical analysis

On the daily chart, the Relative Strength Index (RSI) for the USD/NOK pair resides in the negative territory, indicating a modest bearish momentum. Despite the RSI’s oscillations within the negative and positive zones in recent sessions, the latest reading reveals a clearer downward trend, suggesting that sellers might slightly rule the market at the moment. The Moving Average Convergence Divergence (MACD) histogram, which shows ascending red bars, further supports this. These red bars on the MACD indicate that negative momentum is escalating and that bearish sentiment is taking root.

 

 

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