NOKUSD vs Crude Oil - will this divergence compress soon?

Norwegian Krone is highly correlated to Crude Oil futures (front month), but over the last year it appears to diverge. NOK/USD has continued to slide while Crude stabilised. This could be due to strengthening Dollar, and the low oil prices indicating weaker future economic growth.

The blue trend line marks multi-year highs. With prices touching this trend, combined with a relative underperformance of NOK/USD to Crude, this could see NOK/USD break higher, and soon.

An interesting pair to watch no less, particularly when there is divergence as seen at the end of 2017, which provides an attractive spread trade of Long NOK/USD Short Crude.

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