USDNOK – Trading around a LT level (5.3352)
Last week I got a few emails asking me about the USDNOK, we had it trading in a bearish market condition but it already reached the main long term support level.
When the market gets close to an important LT level, we need to determine the zone on the short term charts, this way we can have a trading plan and will know exactly what the market needs to do in order to start looking for trade opportunities. This is the zone on the USDNOK (defined by both green levels):
From this chart we can conclude the following:
1. It is trading in a well defined short term range (clear S&R levels), therefore we can trade accordingly, look for short opportunities around the top of the range and longs around the bottom of the range.
2. We have determined the zone that the USDNOK needs to break in order to start looking for trade opportunities. A break of the upper extreme will trigger a bullish condition, while a breakout of the bottom of the range will trigger a bearish condition.