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.
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.
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.
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