EUR/NOK traded higher on Monday, after it hit support at 10.113 on Friday. At the time of the test, the 10.113 coincided with the upside line that’s been providing support to the price action since Apr. 29, and thus, we would consider last week’s retreat as a corrective move. That said, before we get confident on another round of buying, we prefer to wait for a move above 10.190, which is Thursday’s high.
Such a move could suggest that the bulls are becoming interested in this pair again, and may pave the way towards Tuesday’s peak of 10.247. We may see a small setback after a potential test near that zone, but if the rate stays above the upside line drawn from the low of Apr. 29, we would see decent chances for another leg north.
If that leg takes EUR/NOK above 10.247, we could experience extensions towards the high of last Monday, at around 10.342.
Shifting attention to our short-term oscillators, we see that the RSI poked its nose above 50, while the MACD, although still negative, stands above its trigger line and points up. Both indicators suggest that the pair may be running out of downside speed, or even started gaining some upside, which supports the notion that the latest slide may be over and that a new round of buying may be on the cards.
In order to abandon the bullish case and start examining for a technical short-term reversal, we would like to see a dip below 10.113. Such a move would take EUR/NOK below the aforementioned upside line and may see scope for declines towards the lows of June 7 and 8, at around 10.038.
If the bears are strong enough to push the battle below that hurdle as well, then the next territory to consider as a support may be at around 9,978, marked by the lows of May 14 and 17.