Overview
This analysis presents a long trade setup for the USD/NOK currency pair based on the price action within an ascending parallel channel on the daily timeframe. The market is currently testing the lower boundary of the channel, suggesting a potential buying opportunity for a reversal towards higher levels.
Technical Analysis
1. Price Channel & Key Levels
The USD/NOK pair has been trending upwards within a rising channel, forming consistent higher highs and higher lows.
Current price: 10.6387, nearing the lower trendline support of the channel.
The upper resistance of the channel aligns near 11.17, making it a potential price target.
A stop-loss level is placed below the channel at 10.43, limiting downside risk.
2. Indicators Confirm Oversold Conditions
Stochastic Momentum Index (SMI): The SMI shows a sharp decline, entering an oversold region, indicating potential bullish momentum soon.
Relative Strength Index (RSI): The RSI is at 21.93, an extremely oversold level, suggesting a possible reversal in the coming sessions.
Trade Plan
Entry: Around 10.63, near the lower boundary of the channel.
Target (Take Profit - TP): 11.17, aligned with the upper trendline.
Stop-Loss (SL): 10.43, below recent lows.
Risk-Reward Ratio: Approximately 2:1, making this a favorable setup.
Conclusion
USD/NOK is currently at a key support level within a well-defined ascending trend channel. Oversold indicators and strong historical price action at this level suggest a bullish reversal is likely. This long position setup provides an excellent opportunity for traders looking to capture the next move towards 11.17, with a defined risk at 10.43.
This analysis presents a long trade setup for the USD/NOK currency pair based on the price action within an ascending parallel channel on the daily timeframe. The market is currently testing the lower boundary of the channel, suggesting a potential buying opportunity for a reversal towards higher levels.
Technical Analysis
1. Price Channel & Key Levels
The USD/NOK pair has been trending upwards within a rising channel, forming consistent higher highs and higher lows.
Current price: 10.6387, nearing the lower trendline support of the channel.
The upper resistance of the channel aligns near 11.17, making it a potential price target.
A stop-loss level is placed below the channel at 10.43, limiting downside risk.
2. Indicators Confirm Oversold Conditions
Stochastic Momentum Index (SMI): The SMI shows a sharp decline, entering an oversold region, indicating potential bullish momentum soon.
Relative Strength Index (RSI): The RSI is at 21.93, an extremely oversold level, suggesting a possible reversal in the coming sessions.
Trade Plan
Entry: Around 10.63, near the lower boundary of the channel.
Target (Take Profit - TP): 11.17, aligned with the upper trendline.
Stop-Loss (SL): 10.43, below recent lows.
Risk-Reward Ratio: Approximately 2:1, making this a favorable setup.
Conclusion
USD/NOK is currently at a key support level within a well-defined ascending trend channel. Oversold indicators and strong historical price action at this level suggest a bullish reversal is likely. This long position setup provides an excellent opportunity for traders looking to capture the next move towards 11.17, with a defined risk at 10.43.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.