The US dollar and the Norwegian Franc – the USD NOK currency pair belongs to the so-called "exotic" because one of its components - the Norwegian Krone (NOK), is not among the most popular world currencies (which are USD, EUR, GBP, JPY, CHF, CAD, AUD, NZD), for which the vast majority of transactions are made on Forex. The pair is rare, the spread is usually impressive (25-50 points), and not all brokers are ready to give their clients the opportunity to trade it.
Due to the very high volatility, USD/NOK can bring an experienced trader not even tens, but hundreds of percent of profit per month, which is very good for a not too popular pair. In addition, a lot of activity makes this financial instrument attractive to scalpers, even despite decent spreads.
USDNOK forecast and quote online
The forecast for today USD/NOK is based on the indicators of more than 15 technical analysis indicators. The strongest forecast is manifested when all signals on all timeframes are repeated with the prefix Active.
Uncertainty and high spreads discourage a considerable number of investors from investing in USD/NOK.
Uncertainty in the long-term prospects is not a reason to completely ignore such a profitable currency pair (with a competent approach, the profit can be up to 500% per month or an impressive 6000% per annum!), therefore, regardless of the risk, it makes sense to enter positions, but first it is advisable to look at a fresh short-term forecast.
Traders working on this currency pair are well aware of how high its volatility can be. The relatively predictable dynamics of the exchange rate is seen only on long-term charts, within a day or in a trading week, the price writes out steep turns.
USD-NOK is the ratio of the value of the US dollar to the value of the Norwegian Krone.
Dollar – Krona is a pair with a direct quote, the main currency is USD, which is bought for NOK. The course display is standard, as with most other tools – up to four decimal places (8,36230), in some terminals up to five.
If the price rises, the dollar becomes more expensive against the crown. If the price decreases, it means the dollar is getting cheaper, and the crown is getting more expensive accordingly. Opening a long position, the investor buys dollars, paying them in Norwegian kroner, with a short position on the contrary – there is a sale of the dollar in order to buy Norwegian kroner.
During the day, USDNOK can overcome a total of 1000 points and even more, which is significant for a currency pair on Forex.
The most active day is usually Thursday, and the calmest is Monday.
USD/NOK refers to an exotic pair, because the group of exotic currency pairs includes the currencies of countries with developing economies, or relatively small countries, to which Norway belongs.
Due to the specificity of such a currency as the Norwegian Krone, the really stormy trading time for the pair is the period of operation of local exchanges in the European session, but there is also enough activity during the American session.
At the beginning of the 21st century, there was a serious strengthening of the Norwegian krona, the greatest impact on this process was a strong increase in oil prices. Norway is known for its strong economy and high quality of life. Oil prices have a strong influence on the exchange rate of the Norwegian currency. It can be strongly influenced by energy prices in the home region and other movements in the energy market. Currencies are influenced by equal factors, so it is not very surprising that USD NOK is characterized by high risks and high volatility.
No matter what anyone says, the United States is still the world hegemon today, and the American economy is the most powerful. By a significant margin, the services sector prevails in the country, accounting for almost 80% of the country's GDP. The role of production has fallen dramatically over the past half century, and now industry accounts for only 19.2% of GDP. Agriculture provides only about 1 percent.
International trade plays a huge role for the United States (the country is the largest importer and exporter of goods), the main partners are the NAFTA countries (Canada and Mexico), China, Japan, and the EU.
Norway's economy is based on the export of raw materials, hydrocarbons and electricity. Huge reserves of oil and gas, forestry and fisheries, provide the country with significant profits. However, the main source of income is the sale of oil and gas, which accounts for more than 50% of exports, and the main partners: EU and USA. The distribution by sector is as follows:
- 74-78% – trade and services (hotel and restaurant business);
- 20-22% – industry;
- 2-3% agriculture.
Tourism is of considerable importance, both for the USA and for Norway. Over the past few decades, as a result of the huge influx of oil money, which began in the 70s, when the development of deposits began on the shelf of the North Sea, the country has transformed and has become one of the most comfortable to live in. At the moment, this attracts a lot of migrants from Africa and Arab countries to the country, which in turn negatively affects tourism and contributes to the growth of crime. Severe weather conditions also often make themselves felt.
Thus, we have a post-industrial economy on the one hand (USA) and an export-raw material economy on the other. The main factors influencing the exchange rate of the US Dollar against the Norwegian Krone, which must be taken into account when performing the analysis, are:
- Prices for hydrocarbons (oil, gas) and raw materials (wood, aluminum);
- The Fed rate and US economic indicators (trade balance, unemployment rate, business activity, inflation, etc.);
- The situation on the US stock market (the growth of major stock indices, such as the Dow, S&P 500 or the NASDAQ technology sector index contributes to the strengthening of the pair).
Features of the currency pair
The USD currency pair does not add certainty to the pair and the price of oil, which last year slowed down the decline and even strengthened somewhat. The Norwegian economy has another important feature – a reserve fund made up of oil profits, therefore, even in the event of a sharp short-term drop in oil prices, the pair's growth is not guaranteed, since the Central Bank is likely to stabilize the crown by resorting to this reserve.
The dollar – Krona on timeframes from H1 and above lends itself well to technical analysis, but, first of all, it reacts to the fundamental latest news, for example, to important economic news on the USA and Norway.
Whatever the forecast and the chosen trading strategy, due to high volatility, you need to be especially careful about setting stop losses and take profits. Experts recommend that when setting a stop order, set its value 3-5 times higher than usual, otherwise, with a high probability, it will easily be taken out, and then the price can calmly turn back in the right direction, although scalpers may neglect this advice. The same can be attributed to setting goals.
Leverage when trading on the US Dollar – Norwegian Krone also needs to be reduced, up to a maximum of 1 to 50, and even better, if up to 1:20 – 1:10, otherwise the prospect of getting a Margin Call can become a reality even inside the day, not to mention opening and holding long-term positions.