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NOK: Breach Of Clustered Support Required For Deeper EURNOK Pullback

NOK

NOK has remained resilient even as front-month TTF futures fall from intraday highs, though EURNOK bears will need to force a clear break through clustered support at 11.7242 (50-day EMA) and 11.6980 (50% retracement of the June 21 to August 5 rally) to signal scope for a deeper pullback. 

  • Today’s sell-off has pulled EURNOK to the lowest since mid-July, with Norges Bank’s hawkish-leaning decision (driven largely by “particular” concern around the weak krone) last Thursday also playing a background role.
  • USDNOK is also 0.7% lower today, eyeing the first support at 10.6014 (76.4% retracement of the June 4 to July 25 rally). Bears will eye a cross of the 20- and 50-day EMAs (currently 10.7968 and 10.7799 respectively) in the coming sessions.
  • This week’s domestic calendar is headlined by Q2 GDP growth, with mainland GDP expected at 0.2% Q/Q by both consensus and the Norges Bank’s June MPR.
  • Although the krone and inflation/wage developments are the primary concerns for the Norges Bank at present, the policy statement continued to note that “if there is a more pronounced slowdown in the Norwegian economy […] the policy rate may be lowered earlier than previously envisaged”. 

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