EUR/NOK sticks to the consolidative theme around 10.2800
|- EUR/NOK remains side-lined near the 200-day SMA.
- NOK looks to risk trend, Brent dynamics for price action.
- Norway’s Manufacturing Production contracted 0.6% MoM in July.
EUR/NOK alternates gains with losses around the 10.28 area on Tuesday, always amidst the broader multi-session consolidation pattern.
EUR/NOK looks to Brent, Norges Bank
EUR/NOK trades in the vicinity of the key 200-day SMA near 10.27 so far, with occasional bearish attempts capped in the 10.20 neighbourhood, which became quite a decent contention for the time being.
In the meantime, the kroner appears somewhat stabilized in the lower end of the recent range in EUR/NOK following the rally in the second half of August, all in tandem with the sharp recovery in prices of the European reference Brent crude.
In the Norwegian docket, the Manufacturing Production contracted at a monthly 0.6% in July and expanded 5.5% vs. July 2020.
Further support for NOK comes in the form of higher NIBOR, which now hovers around the 0.43% level after bottoming out in the sub-0.20% area in late June/early July.
Prospects for NOK, in the meantime, remains well on the constructive side, as Norway’s economic recovery remains healthy accompanied by a solid pace of the vaccination campaign and the firm view that the Norges Bank will hike rates later in the month.
EUR/NOK significant levels
As of writing the cross is up 0.03% at 10.2814 and faces the next resistance at 10.3200 (monthly high Sep.6) followed by 10.3629 (55-day SMA) and then 10.6323 (monthly high Aug.20). On the other hand, a breach of 10.2395 (100-day SMA) would open the door to 10.1985 (monthly low Aug.30) and finally 10.1381 (monthly low Jul.13).
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