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  • EUR/NOK extends the downside to multi-week lows.
  • Krone gained ground on an upbeat survey.
  • Norway Consumer Confidence ticked lower to 12.8 in Q2.

The better note around the Norwegian Krone is forcing EUR/NOK to shed further ground and clinch fresh 4-week lows in the 9.7100 region on Tuesday.

EUR/NOK weaker on positive data

The Krone picked up extra pace today after the auspicious results from the oil investment survey carried on by Statistics Norway.

In fact, the survey showed an increase of nearly 17% in firms’ total investments from 2018 to the current year and an 8.2% increase from 2019 to 2020.

According to the survey, companies’ higher planned investment for the next year mainly follows a further expansion in the oil and gas industry and a strong growth within the manufacturing sector.

All in all, the outlook on investment stays healthy and will most likely echo on higher activity in the oil industry, which in turn translates into better prospects for domestic demand, the business sector, employment and wages, all lending extra support to the hawkish stance from the Norges Bank and the view of a stronger NOK in the next months.

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. Today’s positive results from the Statistic Norway’s survey also reinforces 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 0.22% at 9.7182 and a breach of 9.7119 (100-day SMA) would expose 9.6799 (200-day SMA) and finally 9.6719 (23.6% Fibo of the December-April drop). On the upside, the next resistance emerges at 9.7702 (21-day SMA) followed by 9.8051 (50% Fibo of the December-April drop) and then 9.8206 (high May 17).