EUR/NOK bounces off daily lows after the Norges Bank raised rates

EUR/USD rebounds from lows in the 9.8400 zone on Thursday.
The Norges Bank hiked the policy rate by 50 bps to 1.75%.
Mainland Norway GDP expanded 0.7% QoQ in the second quarter.

Pablo Piovano FXStreet

The Norwegian kroner gives away part of the earlier gains and motivates EURNOK to rebound from earlier lows near 9.8400 on Thursday.

EUR/NOK remains on the defensive post-Norges Bank decision

EUR/NOK fades pat of Wednesday’s string advance following the better tone in NOK after the Norges Bank raised the policy rate by 50 bps to 1.75% at its meeting on Thursday, matching the broad consensus.

The Nordic central bank also gave an upbeat assessment of the Scandinavian economy, highlighting the solid economic activity, low employment and the little spare capacity, all in a context where inflation keeps running higher than initially projected and well above the bank’s 2.0% goal.

The Norges Bank also left the door open to another rate hike at the September event.

Additional buying interest around the kroner comes from the so far modest gains in prices of the European benchmark Brent crude, which adds to Wednesday’s gains near the $94.00 mark per barrel.

Further data in Norway saw the Mainland GDP expand 0.7% QoQ in the April-June period.

EUR/NOK significant levels

As of writing the cross is losing 0.26% at 9.8593 and a breach of 9.7726 (monthly low August 10) would open the door to 9.7672 (monthly low May 5) and finally 9.4325 (2022 low April 8). On the upside, the next resistance emerges at 10.0194 (monthly high August 5) followed by 10.1503 (55-day SMA) and then 10.3987 (monthly high July 1).

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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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