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NOK: US CPI May Provide Additional Bullish Catalyst for USDNOK

NOK

NOK has continued to weaken following the lower-than-expected June inflation reading, through the modest reversal higher in Brent futures may have limited the rally in USDNOK to 0.9% for now.

  • USDNOK thus remains within its range since early-June, though tomorrow’s US CPI release could provide an additional bullish catalyst for the pair.
  • Our US CPI preview notes that a ‘hawkish’ surprise presents the greatest risk to prevailing market positioning, raising the bar for dovish market interpretation of the data.
  • Such a surprise could see USDNOK test the June 10 high at 10.7616. The 50% retracement of the May 1 to June 4 price swing at 10.7870 is seen just above.
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NOK has continued to weaken following the lower-than-expected June inflation reading, through the modest reversal higher in Brent futures may have limited the rally in USDNOK to 0.9% for now.

  • USDNOK thus remains within its range since early-June, though tomorrow’s US CPI release could provide an additional bullish catalyst for the pair.
  • Our US CPI preview notes that a ‘hawkish’ surprise presents the greatest risk to prevailing market positioning, raising the bar for dovish market interpretation of the data.
  • Such a surprise could see USDNOK test the June 10 high at 10.7616. The 50% retracement of the May 1 to June 4 price swing at 10.7870 is seen just above.