USDNOK Is Showing Bearish PatternJan 31, 2023

USDNOK is showing bearish pattern and it’s forming a bearish setup formation from technical point of view and from Elliott wave perspective.

USDNOK is trading sideways for a while, but slow price action and sideways wave structure is normally a consolidation within ongoing bearish trend. From a technical point of view, we can see it forming a nice Head & Shoulders pattern, which can be now finishing a right shoulder, the final pattern before a bearish continuation.

USDNOK Is Showing Bearish Pattern 4-Hour Chart
USDNOK 4-Hour Chart

If we also consider a bearish setup from Elliott wave perspective, where we see it forming a leading diagonal in wave (1), followed by a three-wave A-B-C correction in wave (2), then we should be aware of a bearish resumption within wave (3) of a new five-wave bearish cycle soon. Nice technical resistance is here around 10 level, but bearish confirmation is only below the neckline of H&S pattern and 9.8 region. Invalidation level is at 10.30.

USDNOK Is Showing Bearish Pattern Daily Chart
USDNOK Daily Chart

If USDNOK suddenly rallies and breaks short-term 10.30 invalidation level, then next resistance will be at 10.50, but still with a nice daily bearish H&S pattern.

Happy trading!

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