USD/NOK rebounds as strong ISM services PMI boosts dollar

• USD/NOK rebounded and settled near the 10,935 level.
• In the US, the JOLT job openings index for October was lower than expected. The November ISM Services PMI was better than expected.
• The Dollar Index hit its highest level since mid-November.

In the session on Tuesday, the USD/NOK pair rose and was trading around 10,935 points, with an advance of 0.80%, after data from the Institute of Supply Management (ISM) and job vacancy figures were released ( JOLT ), which were smaller than expected. The dollar managed to shrug off the week’s labor market numbers and capitalized on positive service sector numbers, which pushed the DXY index to its highest level since mid-November.

In that sense, JOLT Job Openings reported by the US Bureau of Labor Statistics for October decreased to 8.733 million, falling from the previous 9.35 million and below the consensus expectation of 9.3 million. On the positive side, the Institute of 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.

With the Federal Reserve (Fed) signaling that it still needs additional evidence that the economy is cooling, strong evidence of economic activity does not favor dovish rhetoric as it could push the Fed to take a more hawkish approach. That said, attention now turns to Friday, when the United States will report average hourly earnings for November, which are expected at 4% year-over-year versus 4.1% previously. Non-Farm Payrolls will also be released, which is expected to have accelerated to 180,000, up from 150,000 previously, while the unemployment rate will stand at 3.9% year-on-year.

These key labor market indicators will play a larger role in the upcoming decisions of the Federal Reserve (Fed), so the price dynamics of the pair could experience volatility depending on their results.

USD/NOK levels to watch

The daily chart indicators reveal that the bulls have gained strong momentum. On the one hand, the fact that the pair is firmly above the 20-day, 100-day, and 200-day simple moving averages (SMA) indicates a dominant bullish sentiment and persistent buying momentum. This observation is further validated by the current ascending red bars of the moving average convergence divergence (MACD) and the positive slope marked on 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