EURNOK - Watching for short again

FX:EURNOK   Euro / Norwegian Krone
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For me it is a big question why NOK             has been trading so weak? S&P             affirmed Norway's 'AAA' rating last week with stable outlook. Other commodity ccys like AUD and CAD are trading quite positive recently, gaining power against EUR. But NOK             is at the range top. Few minutes ago Norwegian Manufacturing PMI (Oct) was published, the number was better than expected: 50,7 (MoM) vs 48,9 exp             (prev 49,5 rev).
Technicals not yet giving a firm sell signal, but it is time to watch!

Daily: The whole year it has been trading in a wide range: 8,1050 - 8,5100.
Ichimoku setup is bullish , but overextended above Kijun Sen. Key levels are: 8,4040 (Tenkan Sen and horizontal), 8,3020 (Kijun Sen, Senkou B, and lower horizontal level)
MACD is turning down, maybe there is a minor negative divergence in it as well. DI+ coming back below ADX , according to this signal we should see some pull back from the overextension.
Slow Stoch may turn down again, the sell signal will happen below 80.

4 Hrs: Bullish Ichimoku setup, but 8,5050 acts as resistance. Chikou Span may hit Price candles, it that happens, we'll see an attack on support levels. The most importan level to watch is 8,40, where we have 100 WMA , bullish trendline and Senkou B (Kumo bottom) all together. A break below 8,40 could bring heavy selling to this pair.

Strategy: I started to buy strikes 8,40 and 8,32 put options for 2 Months maturity. Waiting for firm sell signal on 4 Hrs             to go outright short as well.

I will keep you posted on this trade idea when we get close to the signal.
Poor NOK has clearly become a proxy trade to Oil. As goes WTI goes EURNOK. Even its volatility spiked as it were a commodity itself.
LudmilaHanania Kumowizard
I agree , it has been thrashed with oil. In trading we have extremes that go against fundamentals, that is why for short term trades only TA works. Now long term and fundamentally the NOK is one of if not the best of the paper money.
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