EUR/NOK navigates 2-months peaks around 9.7100

The Norwegian Krone trades flat around the 9.71 area vs. EUR.
The cross keeps the bid tone intact beyond the 9.70 level.
NOK stays vigilant on oil and domestic data.

Pablo Piovano FXStreet

The Norwegian currency is now trading within a sideline theme vs. its European peer, taking EUR/NOK to the area of 2-month tops beyond 9.7100 the figure.

EUR/NOK looks to oil-dynamics

The cross is extending the rally so far today, entering its sixth consecutive week with gains and trading above the 9.70 area, levels last seen in mid-September.

The sharp sell off in crude oil have forced the barrel of European reference Brent crude to shed more than 25% from tops in early October to last week’s troughs in the $64.60 region, in turn sparking a strong rebound in the cross from the 9.4000 region.

However, and banning the recent and temporary results from GDP and domestic inflation, the solid fundamentals of the Scandinavian economy and the prospects of further rate hikes by the Norges Bank in the next months hint at the likeliness that further gains remain in the pipeline for the Krone. In opinion of Analysts at Danske Bank: “With rising wages and strong employment growth set to continue, we therefore still pencil in two rate hikes per year from Norges Bank. We think the balance of risk is skewed towards three hikes, not one, in 2019”.

Looking ahead, crude oil dynamics should continue to drive the mood around NOK in the near term. Data wise, unemployment figures for the month of September are only due this week (Wednesday).

EUR/NOK significant levels

As of writing the cross is down 0.01% at 9.7118 and a breakdown of 9.6069 (10-day SMA) would open the door to 9.5688 (200-day SMA) and then 9.5006 (low Nov.8). On the other hand, the next up barrier aligns at 9.7219 (high Nov.19) seconded by 9.7806 (high Aug.28) and finally 9.8079 (high Sep.7).

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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