USD/NOK dips below key SMAs as Dollar weakness rolls on

• The USD/NOK encounters a 0.50% downslide and trades around the 10.650 level, below the dual resistance of 200 and 100-day SMAs.
• The US Dollar is facing downward pressure due to growing dovish bets on the Fed.
• Thursday’s October PCE figures from the US will be the week’s highlight.

In Monday's trading session, the USD/NOK plummeted, dipping below both the 200 and 100-day Simple Moving Averages and standing around 10.650. These movements are largely attributable to the growing weakness of the USD, particularly ahead of the expected Personal Consumption Expenditures (PCE) figures for the US from October on Thursday, which will be important for the expectations on the next Federal Reserve's movements. No relevant reports were released during the session.

The upcoming week will primarily focus on two key economic indicators for the USD: Gross Domestic Product (GDP) figures for Q3 and the Core Personal Consumption Expenditures (PCE) Price Index, which serves as the Federal Reserve's preferred measure of inflation. It is important to note that the outcome of the PCE data will greatly influence the short-term expectations of the central bank, potentially impacting the trajectory of the USD/NOK pair. 

The Fed has recently hinted that it has yet to see further evidence of inflation coming down after the October Consumer Price Index (CPI) report, which saw the inflation in the US decelerating. In that sense, the PCE and GDP figures on Thursday will give markets further guidance on the US economy's current situation to continue placing their bets. As for now, rate swaps suggest that a no-hike is priced in for the next December meeting, while investors see rate cuts by mid-2024. 

That said, it will all come down to the incoming data as the Fed left the door for further tightening in case needed.

USD/NOK levels to watch

Given the technical indicators on the daily chart, the selling momentum is in command for the time being. The Relative Strength Index (RSI) shows a negative slope pointing towards an increasing bearish momentum. Moreover, it's in the negative territory, solidifying the sellers' dominance. The Moving Average Convergence Divergence (MACD) further affirms the bearish inclination, as the red bars are on an upward trajectory, indicating that bearish momentum is gaining traction

Another bearish signal is the pair's position in relation to its Simple Moving Averages (SMAs). The USD/NOK is trading below its 20,100 and 200-day SMAs, suggesting that the bear's control surpasses the immediate time frame. 

Support Levels: 10.600,10.530,10.460.
Resistance Levels 10.660-10.680 (200 and 100-day SMA convergence), 10.705,10.730.

USD/NOK daily chart