- EUR/NOK remains on the defensive around 10.05.
- The barrel of Brent crude recedes from earlier tops.
- Norway’s Retail Sales shrunk 0.3% MoM in February.
The Norwegian krone gives away part of its earlier gains vs. the single currency and takes EUR/NOK to the 10.05 region on turnaround Tuesday.
EUR/NOK looks to risk trends, crude oil
Following an earlier knee-jerk to the 10.03 area, EUR/NOK regain some upside momentum as sellers in NOK turned up in response to the correction lower in crude oil prices.
In fact, prices of the European reference Brent crude return to the $64.00 zone after climbing as high as the $65.40 zone during early trade following the normalization around the Suez Canal and ahead of the OPEC+ meeting (April 1st), where the oil output cuts are expected to be once again in the centre of the debate.
In the domestic docket, Retail Sales in Norway contracted 0.3% in February from a month earlier and expanded 6.1% over the last twelve months. The drop of sales in grocery stores was mainly behind the decline in the index, all amidst persistent lockdown restriction.
What to look for around NOK
NOK continues to target the psychological 10.00 barrier, always following 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 0.06% at 10.0629 and faces the next resistance at 10.2298 (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 10.0032 (2021 low Mar.11) would expose 9.8163 (2020 low Jan.2) and finally 9.5552 (2019 low Apr.22).
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