EUR/NOK: A little patience is required to see a dive below 10.00 by end-Q3 – Credit Suisse
|Strategists at Credit Suisse continue to target EUR/NOK at 10.00 by the end of Q3. They think that rallies in the pair towards the Q1 highs around 10.48 will offer attractive entry points for new shorts.
Some patience might be required for pro-NOK fundamentals to play out
“We suspect that domestic drivers will remain on the backburner in the near-term. Our assumption is that external factors will remain in the driver seat.”
“We think a bullish NOK target remains appropriate, and we continue to target EUR/NOK at 10.00 by the end of Q3. Norges Bank has shown more willingness than other central banks to upgrade its rate path in the face of stronger data, and conversely to look past weak data. The bank does not have a QE program to unwind, making the messaging cleaner than other central banks juggling several tools.”
“Locally, the country has had relative success in controlling COVID-19, even amid recent hiccups. We suspect however that some patience might be required for these factors to play out in a NOK supportive fashion in current market conditions, and that investor interest in NOK might remain limited until we are closer to 23 Sep interest rate decision.”
“Strategies aiming for a swift move towards our medium-term target of 10.00 and below will still face obstacles. But with longer-term fundamentals still in place, we think that rallies in EUR/NOK towards the Q1 highs around 10.48 will offer attractive entry points for fresh shorts.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.