EUR/NOK paring early gains (Barcelona) - The Norwegian krone has sharply depreciated against the euro after inflation figures in Norway came in softer than expected. Core CPI rose 1.2% in June, below Norges Bank’s forecast.

According to FI Strategist at SEB, E.Blomgren, lower inflation was due to a decline in prices of furniture, clothes and food. The expert also suggests that inflation figures wouldn’t justify a rate cut in the upcoming months or the central bank would raise rates earlier.

In another direction, Norwegian government has intervened to prevent a shut down in the oil production ealier on in the European morning, giving NOK an extra impulse.

EUR/NOK is up 0.05% at 7.4910 with the next resistance at 7.5107 (MA10d) followed by 7.5254 (high Jul.9) then 7.5313 (high Jul.6) and 7.5331 (MA30d).
On the downside, a breakdown of 7.4600 (low Jul.5) would bring 7.4547 (Lower Bollinger) then 7.4000 (psychological level) and 7.3927 (2012 low Mar.5).

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