Krone Proves Resilient Despite Weaker Oil, EURNOK Resistance in Focus

NOK is little changed against the G10 today despite the >1% decline for Brent crude futures. Trendline resistance for EURNOK may be assisting this Krone resilience, and should remain a key short-term focus.

• Earlier in the session, EURNOK rose to its highest level since May 02, reaching 11.8176. This briefly extended the impressive rally off the June lows to around 5%, with the recent Krone weakness being driven by the lower-than-expected domestic June CPI print.
• Notably, today’s peak has respected a key trendline drawn from the May 2023 high. This now marks a clear short-term resistance point for the cross, and is bolstered by key resistance just above at 11.8733, the May 1 high.
• The Norges Bank will get to see the July inflation data (due August 9) before its next rate decision on August 15. The volatile and sharply weaker krone may provide another reason for it to maintain its hawkish tone, even if inflation remains firmly below the June MPR forecast at that point. This may provide the basis for a deeper EURNOK pullback, with support not seen until 11.5781 (Jun 7 high) and 11.5215, the 50-day EMA.