NOK: Crude Weighs, Bearish Conditions In NOKSEK Remain Prevalent

Aforementioned crude weakness has weighed on the NOK, with NOKSEK now 0.4% lower and eyeing the Aug 23 low at 0.9644. A clear breach of this level would re-expose multi-year pivot support around 0.9500, which was last tested in early August.

• Dovish developments in next week’s August CPI data and the Q3 Regional Network Survey could enable a test of this support, given their importance in shaping the Norges Bank’s rate path at the Sep 19 meeting - which saw close to no chance of a rate cut until next year in June's update.
• Clearance of 0.9500 would open up 0.9274 (November 2022 low) over the longer-term.
• Moving average studies in NOKSEK have been in a bear-mode set-up since mid-July, and the failed breach of the 50-day EMA on August 16 reaffirmed bearish conditions in the cross, despite last month’s hawkish-leaning Norges Bank decision.
• This week’s domestic calendar is light, though NOK – like other risk-tied currencies – will be sensitive to Friday’s US labour market release.