Forex Market: USD/NOK daily forecast

During yesterday’s trading session USD/NOK traded within the range of 6.1767-6.2215 and closed at 6.2108.

At 6:21 GMT today USD/NOK was gaining 0.18% for the day to trade at 6.2203. The pair touched a daily high at 6.2252 at 5:50 GMT.

Fundamental view

Norway

At 8:00 GMT Statistics Norway is to report on nation’s trade balance during June. The surplus on Norway’s trade balance was 26.79 billion NOK during May. As an indicator the trade balance reflects the difference in value between exported and imported goods during the respective period. The External Merchandise Trade encompasses crude oil, natural gas, as well as ships and oil platforms alongside “traditional goods”. Export demand has a direct link to demand for the national currency and also causes an impact on levels of production. In case Norway’s trade balance surplus expanded more than projected last month, this would have a bullish effect on the krone.

United States

United States’ annualized index of producer prices (PPI) probably jumped 1.8% in June, according to the median estimate by experts, after adding 2.0% in the previous month. This index reflects the change in prices of over 8 000 products, sold by manufacturers during the respective period. The PPI differs from the CPI, which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the country. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. Higher than expected producer prices would have a bullish effect on the greenback.

At the same time, nation’s annualized core PPI, which excludes prices of volatile categories such as food and energy, probably rose 1.6% in June, following a 2.0% gain in the previous month. This indicator is quite sensitive to changes in aggregate demand, thus, it can be used as a leading indicator for the economy. However, because of its restrained scope, it is not suitable for future inflation forecasts.

The US Bureau of Labor Statistics is expected to publish the official PPI readings at 12:30 GMT. Higher-than-expected readings would support greenback’s demand.

Technical view

According to Binary Tribune’s daily analysis, in case USD/NOK manages to breach the first resistance level at 6.2293, it will probably continue up to test 6.2478. In case the second key resistance is broken, the pair will probably attempt to advance to 6.2741.

If USD/NOK manages to breach the first key support at 6.1845, it will probably continue to slide and test 6.1582. With this second key support broken, the movement to the downside will probably continue to 6.1397.