LFS Nov employment data was a huge shocker with a sharp rise in unemployment rate from 3.2% to 3.5%. Analysts consensus was 3.2% unchanged. This increase in unemployment rate was surprising as recent data improvement suggest that jobless rate will continue its fall.
Price has punched above the 5.50 resistance, which was capping bullish activities during Asian trading hours. Price look to be heading towards the next significant resistance 5.51, though more resistance can be expected between 5.51 – 5.55 consolidation area.
How is this new development going to affect short-term sentiment towards NOK? We have the best litmus test a few hours later in the form of US GDP and FOMC decision. Keep a look out for pro-USD strength development and check on the bullish follow-through. Price failing to break resistances despite strong US fundametnals can be interpreted as a show of strength/confidence in NOK. Conversely, if USD/NOK continues to remain elevated despite weak US news, we will know that market is swinging to be bearish NOK.
Long term trend remains bearish, as price has broken the 5.58 support, opening up previous swing low in Apr as a viable bearish target. Interim support could be found along 5.38. However, should the bearish NOK/ bullish USD narrative gain traction, we could still see a bullish reversal around 5.58 to push us back to 6.18 ultimately, with 5.78 as resistance.