- The Norwegian Krone plunged to a 2-1/2 year low, as the greenback surged after the Federal Reserve cut rates by 25 basis points as expected but tampered market expectations of a lengthy easing cycle.
- Moreover, the selling pressure around the Norwegian currency intensified after data showed manufacturing activity contracted in the month of July.
- Norway's NIMA manufacturing PMI came in at 48.4 in July, below forecast of 51.1 and previous month reading of 51.4 revised.
- USD/NOK trades 0.3 percent up at 8.8744, having touched a high of 8.8947 earlier, its highest since Jan 2016.
- RSI is strong at 70.30 and MACD supports uptrend. Scope for further upside.
- Stochs indicate crossover, a minor dip expected.
- Immediate resistance is around 8.9000, and any violation above could take it till 8.9556/ 8.9936.
- On the downside, support is located at 8.8436, break below could take it till 8.7864 (50% retracement of 8.6728 and 8.8947).
Recommendation: Good to buy on dips around 8.8500, with stop loss at 8.8436 and target price of 8.9556.
