EUR/NOK 1H Chart: Channel Down

The European common currency is trading in a channel down against the Norwegian Krone. The given pattern is a relatively narrow short-term formation that can be considered as a part of an intermediate ascending channel.

The rate reached the lower channel boundary of both patterns mid-session and therefore is expected to dash above the 9.32 mark to initiate a new wave upwards in line with the senior formation. Trend indicators demonstrate weakening of the down-trend, while other technicals support an upward breakout.

This movement should be confirmed when the pair surpasses the 55-hour SMA circa 9.33 or the 23.6% Fibonacci retracement at 9.3380. In case the rate still manages to trade lower before the predicted reversal, it might be halted by the weekly S2 located near the four-month low at 9.25.

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The common European currency is trading in two channels simultaneously against the Norwegian Krone. The senior pattern has confined the rate in a slight upward momentum for the last three weeks. The junior one, however, formed when the rate failed to push trough the 9.4045 mark this week.

During the time, the rate has been fluctuating around 9.38 where the 38.2% Fibo, the weekly R2 and the monthly R1 are located. As the rate had already tested the upper channel boundary prior to edging lower, it might be suggested that this bearish sentiment is likely to continue, most probably down to the 23.6% Fibo near 9.32.

This area is likewise reinforced by the 200-hour SMA and the weekly and monthly PPs. However, the rate has to break the aforementioned 9.38 mark to confirm this assumption.