EUR/NOK off three-week highs, still above 10.00
- EUR/NOK moved to the boundaries of 10.07 earlier today.
- Unemployment rate in Norway ticked lower to 2.3% this month.
- Norges Bank expected to raise rates in September.
The Norwegian Krone is regaining some upside traction today and is motivating EUR/NOK to recede from earlier three-week highs just below the 10.07 level.
EUR/NOK stays close to 2019 highs
Despite the ongoing knee-jerk, the rally in the cross remains well and sound, advancing more than 5% since July’s low in the vicinity of 9.5800 to early August’s 2019 high just shy of the 10.10 level.
NOK is appreciating today despite lower prices of the barrel of the European reference Brent crude, which are down over 1% near the critical $60.00 mark at the time of writing.
The Krone has managed to pick up pace after the jobless rate dropped to a non-seasonally–adjusted 2.3% for the current month, highlighting the solid momentum in the domestic labour market in perfect correlation with the good health of the economy overall.
In addition, the Norges Bank announced it will purchase NOK 700 billion per day of foreign currency during next month, up from NOK 500 billion.
What to look for around NOK
Another rate hike by the Norges Bank at the September meeting now appears to be on the horizon in light of better results from key fundamentals and despite the Scandinavian central bank showed some unexpected flexibility regarding the future rate path at the latest event. In the meantime, and while the Nordic economy keeps its shine intact, developments overseas, particularly those linked to the US-China trade war and increasing volatility in crude oil dynamcis, could cast dark clouds on the domestic economic outlook and hurt the central bank’s perspective and undermine at the same time the bullish prospect for the Krone.
EUR/NOK significant levels
As of writing the cross is losing 0.19% at 10.0352 and a breach of 9.9764 (21-day SMA) would expose 9.9014 (low Aug.14) and finally 9.7912 (55-day SMA). On the upside, immediate resistance lines up at 10.0694 (high Aug.29) seconded by 10.0972 (2019 high Aug.7) and then 10.1174 (all time high December 2008).