EUR/NOK challenges multi-day lows near 9.87 on Brent gains
- NOK advances to multi-day highs vs. the single currency.
- Rally in crude oil gives extra legs to the Krone.
- EIA weekly report next of relevance in the docket.
The Norwegian Krone is appreciating for the second consecutive session at the end of the week and is dragging EUR/NOK to test flirt with multi-day lows in the 9.8700 neighbourhood.
EUR/NOK looks to Brent, risk trends
The cross remains under further downside pressure in the second half of the week, with the demand for the Scandinavian currency picking up further pace on the back of the continuation of the up move in crude oil prices.
In fact, NOK remains bid and supported by the fifth consecutive day with gains in the barrel of the European reference Brent crude, which has so far managed to regain the $57.00 mark and above after plummeting to psychological $50.00 milestone late in December.
What to look for around NOK
Brent dynamics should stay as the significant driver for the Krone. On a broader picture, the Nordic economy stays strong despite December’s manufacturing PMI eased a tad from November, although later unemployment figures showed the jobless rate remains anchored around 4.0%. Supporting the expected appreciation of NOK in the next months, the Norges Bank is seen hiking twice this year (likely in March and September) along with two hikes per year in 2020-21.
EUR/NOK significant levels
As of writing the cross is losing 0.29% at 9.8697 facing the next down barrier at 9.8597 (low Jan.4) seconded by 9.7124 (55-day SMA) and then 9.6298 (low Dec.5 2018). On the other hand, a break above 9.9407 (10-day SMA) would aim for 10.0619 (2018 high Dec.27) and finally 10.1750 (monthly high Dec.2008).