Market news

23 June 2022

EUR/NOK flirts with YTD highs near 10.50 post-Norges Bank

  • EUR/NOK alternates gains with losses near 10.50.
  • The Norges Bank raised the policy rate by 50 bps.
  • Higher Brent prices fail to lend support to NOK.

EUR/NOK navigates the middle of the daily range near 10.50 in the wake of the interest rate hike by the Norges Bank on Thursday.

EUR/USD now trades close to monthly peaks

EUR/NOK attempted a move higher earlier in the session, although the bullish attempt seems to have run out of steam around 10.52 despite the Norges Bank raised the key rate to 1.25% at its meeting on Thursday.

The Nordic central bank stressed that domestic fundamentals look solid and unemployment continues to decline. However, inflation is forecast to remain above the bank’s target for some time on the back of rising wage growth and prices of imported goods.

The Norges Bank also announced that the policy rate “will most likely be raised further to 1.5% in August”.

On another front, the Norwegian kroner appears indifferent to the current rebound in prices of the barrel of the European reference Brent crude, which regain the $111.00 mark after bottoming out near $107.00 on Wednesday.

EUR/NOK significant levels

As of writing the cross is gaining 0.09% at 10.4767 and faces the next resistance at 10.5393 (2022 high June 16) followed by 10.6323 (monthly high August 20 2021) and then 10.7035 (2021 high July 20). On the other hand, a breach of 10.3158 (weekly low June 21) would open the door to 10.0230 (monthly low June 1) and finally 9.9693 (200-day SMA).

 

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