Technical Analysis – GBPNOK consolidates to test an uptrend line
Posted on October 7, 2019 at 3:26 pm GMT
Anthony Charalambous, XM Investment Research Desk
GBPNOK moves sideways as downside pressure from sellers denies gains above the recent peak of 11.34. The consolidation in price has found support at the uptrend line drawn from the twenty-one-month low of 10.54.
The short-term oscillators reflect a stall in momentum but lean more to the positive picture. The MACD looks to move back above its red trigger line, although currently below it in the positive region. Whereas the RSI, which is midway in bullish territory, has turned upwards. Moreover, the 50-day simple moving average (SMA) looks to be heading for a bullish crossover of the 200-day SMA, thus backing the positive outlook.
If the bulls bounce off the uptrend line, the price could find initial resistance from the recent peak of 11.34. Climbing above it, the inside swing peak of 11.44 from March 27 could apply some pressure ahead of the nearby peaks of 11.51 and 11.54 recorded on May 6 and March 8 respectively.
To the downside, if the bears break below the uptrend line, the first support could come from the 11.14 level, which is the 61.8% Fibonacci retracement of the up leg from 10.54 to 11.34. Falling lower, the 200-day SMA currently at 11.07 could interrupt efforts to test a tougher obstacle at 11.02, which is the 50.0% Fibo and where the 50-day SMA resides. Further declines could halt at the 100-day SMA around 10.95. If the selling continues, the 38.2% Fibo of 10.90 may draw attention before the swing low of 10.83.
Overall, the short-term bullish bias is still intact and a breach above 11.34 would reinforce it. Yet a break below the uptrend line and moreover below 10.90 would turn the bias neutral-to-bearish.