EUR/NOK set to decline towards 9.50 over the summer – Nordea

A higher oil price and improved risk sentiment has brought EUR/NOK slightly below 10.00 again. While economists at Nordea do see more downside in the cross ahead, it is probably limited.

EUR/NOK is under 10.00 again

“EUR/NOK could fall a bit more in the short-term, but the downside is very limited. From a technical perspective, the current RSI of 35 implies we are close to the bottom for now, but EUR/NOK has a bit more to fall until RSI reaches 30 – a level that would indicate that NOK is overbought against the EUR. Overall, we see EURNOK trading in the range 9.95-10.15 in the short-term.”

“At some point the fall in EURNOK will take a break, and we would not be surprised if the cross moves up again. Since the meltdown in March last year, the whole way down has been characterised by EUR/NOK moving two steps down, one step up, etc. This will likely continue also ahead. But the overall direction towards the summer is lower.”

“The combination of higher oil prices and higher rates in Norway is why we hold our view for EUR/NOK coming further below 10.00 towards and over the summer. But the downside is restricted: EUR/NOK traded mostly in the range 9.50-10.00 during 2018/19 and we don’t expect to see much more downside than 9.50.”