The USD/NOK price was in a tight range on Wednesday as the market reflected on the prices of crude oil and the upcoming US consumer inflation data. The pair is trading at 8.8187, where it has been in the past few days.
Crude oil prices
Norway is one of the biggest oil producers in Europe. The country produces and exports millions of oil barrels every day. As a result, the country’s economy and its sovereign wealth fund perform well in a period of high oil prices.
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Recently, the price of crude oil has been in a strong bullish trend. Brent, the global benchmark, rose to a 7-year high of $92 while the West Texas Intermediate (WTI) crossed the $90 level this week.
The strong performance of crude oil prices is mostly because of the ongoing crisis in Ukraine. Western countries like the UK and the UK believe that Russia is planning an invasion. While Russia has rejected these claims, it has continued its military presence near the Ukrainian border.
This crisis is important for oil prices because of the volume of oil that Russia sells abroad. It is the third-biggest oil producer after the US and Saudi Arabia.
The USD/NOK pair has also held steady because of the expectations that the Norges Bank will implement a rate hike when it meets in March. It will be the first interest rate decision meeting under the former NATO chief.
The hawkish tone of the bank is already priced in because of the strength of the Norwegian economy. The economy has done well, helped by the stimulus offered by the government, high vaccination rates, and the overall higher oil prices.
The next key catalyst for the USD/NOK pair will be the upcoming American consumer inflation data scheduled for Thursday.
USD/NOK technical analysis
The four-hour chart shows that the USD/NOK pair has been in a tight range in the past few days. The pair is trading at 8.8187, which is about 2.57% below the highest level this year. The price is slightly below the chin of the double-top pattern at 8.8591.
The USD/NOK price is also trading at the same level as the 25-day and 50-day moving averages. Therefore, there is a likelihood that the pair will break out lower in the coming days. If this happens, the next key level to watch will be at 8.700.
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Source: https://invezz.com/news/2022/02/09/usd-nok-is-it-safe-to-buy-or-sell-the-norwegian-krone/