USD/NOK takes an upwards rally as solid ISM Services PMI boosts the Dollar

• The USD/NOK rallied and settled near the 10.935 level.
• US JOLTs Job Openings for October where lower than expected. The ISM Services PMI in November came in better than expected.
• The US Dollar Index rose to its highest since mid-November.

In Tuesday's session, the USD/NOK edged higher, trading around 10.935 seeing 0.80% gains following the reports of robust Institute for Supply Management (ISM) reading and softer-than-anticipated JOLTs Openings figures. The USD managed to shrug off the week's labor market figures and capitalized on the positive figures of the service sector, which fueled the DXY index to its highest since mid-November.

In that sense, the JOLTs Job Openings reported by the U.S. Bureau of Labor Statistics for October decreased to 8.733 million, falling from the previous 9.35 million and below the 9.3 million consensus expectation. On the positive side, the Institute for Supply Management (ISM) Services PMI for November had a consensus forecast of 52 and increased from 51.8 to 52.7, indicating a slight expansion in the services sector.

As the Federal Reserve (Fed) noted that it still needs additional evidence of the economy cooling down, the strong economic activity evidence doesn’t favor the dovish rhetoric as it could push the Fed to take a more aggressive approach. That being said, the focus now shifts to Friday, where the US will report the expected Average Hourly Earnings from November at 4% YoY vs the previous 4.1%.  The Nonfarm Payrolls are also due and expected to have accelerated to 180,000, compared to the previous 150,000, while the Unemployment rate is seen coming in at 3.9% YoY.

Those key labor market metrics will play a bigger role in the next decisions of the Federal Reserve (Fed), so the pair price dynamics may see volatility based on their outcome.

USD/NOK levels to watch

The daily chart indicators reveal that the bulls have gathered strong momentum. On one side, the fact that the pair is stationed firmly above the 20, 100, and 200-day Simple Moving Averages (SMAs) indicates dominant bullish sentiment and persistent buying momentum. This observation is further validated by the current rising red bars of the Moving Average Convergence Divergence (MACD) and the positive slope marked in the Relative Strength Index (RSI).

Support Levels: 10.840 (20-day SMA), 10.710 (200-day SMA), 10.670 (100-day SMA).
Resistance Levels:11.000, 11.130, 11.250.

USD/NOK daily chart