EUR/NOK 4H Chart: Channel Up

Although a strong rally that started two months ago came to a sudden stop in mid-November, EUR/NOK did not lose its bullish momentum and continued to trade above the 200-period SMA and thereby formed a channel up.

And while the most recent price action may not be encouraging—the rate has been anchored to the up-trend support line since Dec 19, a surge from the current trading levels is a high-probability event. This recovery could potentially extend up to 8.65 before the currency pair undergoes a bearish correction. Meanwhile, the sentiment towards EUR/NOK is strongly bearish—75% of open positions are short.