DKK/USD price forecast ahead of the US CPI report

    One of the most interesting currencies in Europe is the Danish krone (DKK), the official legal tender in Denmark, Greenland, and the Faroe Islands. The krone has existed for hundreds of years, but what is interesting in our times is that it is pegged to the euro – the common currency.

    The peg is at a rate of 7.46, but with a flexibility band of 2.25%. Effectively, it means that the krone can deviate from the euro by no more than +/-2.25%.

    Because of that, trading the DKK/USD currency pair is virtually like trading the EUR/USD. Here is a chart showing the two currency pairs moving hand in hand.

    DKK/USD chart by TradingView

    Therefore, before trading the DKK/USD, the trader needs to know that taking a position on this currency pair is like trading the EUR/USD. Hence, news out of Europe and the United States will move this market, such as the upcoming inflation report for April, scheduled for release in a few hours from now.  

    DKK/USD chart by TradingView

    In a bullish trend, the market advances with an impulsive wave and declines with a correction. The DKK/USD currency pair tracked the EUR/USD one and formed an impulsive move from the last October lows.

    Since then, and especially in 2023, the market is in a corrective phase. More precisely, the first two corrections, waves a and b appear to be completed, and now the c-wave should start.

    Therefore, the technical part suggests that the DKK/USD exchange rate should ease from here, and a move toward 0.14 is in the cards. On the flip side, a move above the 2023 high invalidates the bearish scenario.

    The post DKK/USD price forecast ahead of the US CPI report appeared first on Invezz.

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