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CP31 – USD/NOK

THIS CORE POSITION WAS CLOSED: 1st August 2022

CORE POSITION TRADE
TRADE REFERENCE CP31:

DATE: 11th May 2022
PROJECTED TRADE PERIOD: 2022 - 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).

AS the ECB plans lift off out of its accommodative cycle, EUR strength will play into this pair short via NOK strength with the USD sitting in the middle as EUR strength should also move the EUR/USD higher away from the recent support of 1.0500.

All three currencies interact into how I believe the USD/NOK will play out throughout the remainder of 2022 and into 2023.

As we know the USD and NOK Central Banks are both HAWKISH, with the FED dominating moves in this pair, primarily due to the pair being somewhat illiquid vis-à-vis other pairs. It is EUR strength and its geographical proximity to Norway that will influence this pair. In normal trading conditions it does usually operate as an inverse currency to the EUR/USD. Hence my attraction to this set up medium to long-term.

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.

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.

 

SUPPORTING CHARTS:

WEEKLY CHART:

From the chart above the triangle break higher was always going to bring an opportunity to short. It was just a question of when NOT if.

I am using areas of confluence and spikes higher and lower as areas of entry.

Longer-term, I do expect to see a much stronger NOK currency and my GLOBAL LIMIT is currently position at a March 2022 spike low of 8.5700

USDNOK-CP31-W-11052022

 

EXISTING LIVE and LIMIT ORDERS:

CP31-CLOSED

 

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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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