EUR/NOK bounces off lows near 9.9500

EUR/NOK regains the upside above the 10.00 mark.
Norway CPI-ATE rose 2.0% YoY, 0.45 MoM.
The barrel of Brent crude approaches the $69.00 mark.

Pablo Piovano FXStreet

The Norwegian krone gives away part of the earlier gains and now motivates EUR/NOK to retake the 10.00 mark and above on Monday.

EUR/NOK rebounds from 9.9500

After briefly testing daily lows in the 9.95 region earlier in the session, EUR/NOK managed to regain some composure and reclaim the 10.00 yardstick and above at the beginning of the week.

NOK remains on the defensive despite the European reference Brent crude is posting decent gains on Monday, although it still trades below the key hurdle at the $70.00 mark per barrel.

In the docket, the krone reverses earlier gains after inflation figures in Norway came in on the soft side in April. In fact, the headline CPI rose 0.3% and 3.0% YoY, while the CPI-ATE gained 0.4% inter-month and 2.0% from a year earlier.

What to look for around NOK

NOK loses some momentum although it manages well to keep the trade around the critical 10.00 yardstick. As usual, price action around the krone is expected to track Brent dynamics and the hawkish stance from the Norges Bank. That, coupled with a faster economic recovery, the firm vaccine rollout and prospects of a solid rebound in the global activity are seen collaborating with the view of a stronger currency in the medium-term. It is worth recalling that the Norges Bank is predicted to be one of the first central banks to hike rates in the DM space.

EUR/NOK significant levels

As of writing the cross is up 0.19% at 10.0098 and faces the next resistance at 10.0694 (50-day SMA) seconded by 10.2749 (weekly high Mar.24) and then 10.4826 (monthly high Feb.26). On the other hand, a breach of 9.9116 (2021 low Apr.29) would expose 9.8163 (2020 low Jan.2) and finally 9.5552 (2019 low Apr.22).

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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