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CP32 – USD/NOK:

USD/NOK:

CORE POSITION TRADE
TRADE REFERENCE CP32:
DATE: 23rd September 2022
PROJECTED TRADE PERIOD: Q4 2022 – H2 2023
CURRENCY PAIR: USD/NOK

TRADE DIRECTION: SHORT

 

THOUGHTS BEHIND THE TRADE:

This currency is closely aligned to that of the ECB, because of geographical location. It is also influenced by its neighbour Sweden (SEK).

We are in unprecedented times at the moment vis-à-vis FX market volatility and as the EUR struggles with USD overwhelming strength, this pair will weaken as a result moving the pair higher, maybe back toward the covid lockdowns levels c.12.000.

At the most this pair is driven by oil price and the FED’s policy on its determination to fight and beat inflation. Whilst the Norwegian economic fundamentals remain strong, GDP is brilliant at the moment, albeit fairly consistent. Unemployment is very low, and the country is basically well-run and as we all know it has a mighty impressive

USD$1trillion Sovereign Wealth Fund. The bottom line appears to be that the Norway overall is fundamentally in good shape.

Norway has one of the strongest economies in the world and whilst it is treated as an OIL based economy, 25% of Norway’s GDP emanates from OIL and GAS, it’s well renowned Sovereign Wealth fund (USD 11 trillion) invests billions throughout the globe and the economy’s ability to be diverse with strength is the envy of many especially with OIL as a backstop.

The bottom line for me is, Norway operates at full employment and the economy is well managed and inflation is controlled. NOK strength is always a factor to consider against a basket of other currencies.

 

TRADE PLAN:

My goal here is very straightforward with idea, execution is the key critical success factor to its success moving forward through the tear end 2022 into next year.

I will be layering in “SELL STOP” limit orders as NOK weakness continues ready to capitalize on NOK strength as the USD reversal occurs.

The big question is of course, when will this happen?
The answer is of course that I do NOT know BUT, I want to be ready. Given that the USD strength move has been relentless, when it comes off it should be powerful.

NOTE: I could be adding in “layer trades” for a while before the we actually see the move that I am projecting trigger.

 

SUPPORTING WEEKLY CHART:

As you can see from the chart below, the USD/NOK move higher has been confirming and my initial thoughts that the move would stop c.10.3000 or c.10.5000 have both fallen on deaf ears.

My thoughts right now is place my GLOBAL STOP above the covid (March 2020) highs at 12.2000, and layer in short trades as we move higher.

CP32-USDNOK-WEEKLY-CHART

 

TRADE UPDATE: 19.12.2022
CP32-USDNOK

 

EXISTING LIVE and LIMIT ORDERS:
CP32-P1
CP32-2

 

 

 

 

 

 

 

 

 

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FLASH, MOMENTUM, SWING, RADAR, FUNDAMENTAL, BREXIT, INVESTOR and POSITION (CORE POSITION) trade set-ups, “Tweets” and “Trade ideas” that are posted in my blogs or on Twitter are trades and set-ups that interest me. They are provided for training and informational purposes only and should not be interpreted as an offer, solicitation or recommendation of any specific security or investment strategy. Past performance is not indicative of future results. Trading Forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial adviser if you have any doubts.

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