Search ForexCrunch
  • The cross clinches multi-week highs near 9.88 and retreats afterwards.
  • Norges Bank left its refi rate unchanged at 1.0% on Thursday.
  • Norway CPI surprised to the upside during April.

After clinching fresh +2-month tops during early trade in the boundaries of the 9.8800 handle, EUR/NOK has now receded from that area and turned negative for the day around 9.8100.

EUR/NOK lost upside momentum post-data

The cross is trading on the defensive after three consecutive daily advances and despite the recent hawkish message from the Norges Bank at its meeting on Thursday.

NOK gained extra pace today after inflation figures in the Scandinavian economy showed consumer prices rising 0.4% MoM during April and 2.9% from a year earlier. Further results saw Core CPI YTD rising at 2.6% and Core Inflation gaining 0.5% on a monthly basis.

Furthermore, Producer Prices advanced at an annualized 2.6% during April (from March’s 5.2% gain).

What to look for around NOK

The mood around the risk complex, Brent-dynamics and a healthy economy continue to be the main drivers for the Norwegian currency for the time being. This view is reinforced by the hawkish stance from the Norges Bank, which will likely hike the repo rate at the next meeting in June. In the broader picture, growth above trend, increasing capacity utilization, lower unemployment and upward pressure in wages and prices are expected to keep the central bank on a more aggressive mood for the time being and reinforces at the same time the view of a stronger Krone in the months to come.

EUR/NOK significant levels

As of writing the cross is retreating 0.40% at 9.8116 and a break below 9.7450 (low May 7) would aim for 9.7277 (100-day SMA) and finally 9.6674 (200-day SMA). On the upside, the next hurdle emerges at 9.8761 (high May 10) followed by 9.8803 (high Mar.8) and then 9.9059 (23.6% Fibo of the October-December up move).