EUR/NOK bounces off 7-week lows around 9.81

EUR/NOK dropped and tested sub-9.81 levels in early trade.
Norges Bank raised rates by 25 bps, in line with expectations.
The central bank is expected to remain on hold for the next periods.

Pablo Piovano FXStreet

The Norwegian Krone faded the initial spike vs. the single currency and is now lifting EUR/NOK to the 9.90 region.

EUR/NOK offered despite rate hike

NOK has initially spiked to fresh multi-week highs vs. EUR in the area below 9.81 after the Norwegian central bank (Norges Bank) raised the key rate by 25 bops to 1.5%, broadly in line with market expectations.

However, the Scandinavian central bank hinted at the likeliness that rates would now stay at current levels for the next periods, removing some hawkishness to the earlier decision.

The central bank kept the upbeat outlook on the Nordic economy nonetheless, reiterating that capacity is running above normal levels, inflation is around the bank’s target and fundamentals look solid.

EUR/NOK significant levels

As of writing the cross is gaining 0.40% at 9.9047 and faces the next hurdle at 9.9371 (21-day SMA) seconded by 9.9759 (23.6% Fibo of the July-August rally) and then 10.0694 (high Aug.29). On the flip side, a breach of 9.8098 (monthly low Sep.19) would expose 9.8029 (100-day SMA) and finally 9.7675 (200-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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