Head of FX Strategy, Saxo Bank Group
Summary: The FX Breakout Monitor suggests the market wasn't entirely shocked by the FOMC meeting yesterday, or at least doesn't know what to do in its wake. The NOK tried to extend higher on today's rate hike, but has stumbled badly from intraday highs.
USDNOK recently tried breaking to a new 19-day low, and did so with more force intraday today, but the break is not holding up so far today even after the Norges Bank surprised consensus with a 25-basis point rate hike today, heading in the opposite direction of virtually every other active central bank. Note the local Fibonacci retracement in play and the need to work much lower to begin reversing this latest dramatic rally wave.
NOKSEK has tried a recent break higher on weak Swedish employment data, the crude oil spike (although this quickly reversed) and now on the Norges Bank rate hike, but the lack of a hold higher and possible sense that this is the last hike for some time after the Norges Bank said that there was little scope for further hikes.
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