EUR/NOK breaches below 10.00 on oil gains
|- EUR/NOK moves lower and breaks below the 10.00 mark.
- Brent prices rise nearly 2% beyond the $52.00 handle.
- Risk-on mood sustains the upside in NOK.
The Norwegian Krone is picking up extra pace on Wednesday and it has now motivated EUR/NOK to break below the critical support at 10.00 the figure.
EUR/NOK in two-week lows
The Krone is trading on a positive mood in response to the improvement in crude oil prices, with the barrel of European reference Brent crude prolonging the recovery beyond the $59.00 mark per barrel.
In addition, NOK is deriving extra buying interest from the domestic docket so far this week: the manufacturing PMI returned to the expansion territory in August (53.8) and the House Price Index rose 2.6% on a year to August (from 1.5%). On the not-so-bright side, the Current Account surplus shrunk to NOK30.6 billion during the April-June period.
What to look for around NOK
Another rate hike by the Norges Bank at the September meeting now appears to be on the horizon in light of better results from key fundamentals and despite the Scandinavian central bank showed some unexpected flexibility regarding the future rate path at the latest event. In the meantime, and while the Nordic economy keeps its shine intact, developments overseas, particularly those linked to the US-China trade war and increasing volatility in crude oil dynamics, could cast dark clouds on the domestic economic outlook and hurt the central bank’s perspective and undermine at the same time the bullish prospect for the Krone.
EUR/NOK significant levels
As of writing the cross is losing 0.01% at 9.9826 and a breach of 9.9535 (low Sep.4) would expose 9.9014 (low Aug.14) and finally 9.8018 (55-day SMA). On the upside, immediate resistance lines up at 10.0694 (high Aug.29) seconded by 10.0972 (2019 high Aug.7) and then 10.1174 (all time high December 2008).
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