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NOKSEK Unable To Breach Parity Despite Brent Rally

NOK

NOKSEK has thus far been unable to meaningfully break through the psychological resistance at parity (BBG shows a short-lived 1.0001 print), with Brent crude prices now up around 4%.

  • Oil-sensitive NOK and CAD outperform the G10, as UK/US strikes in Yemen widen the geopolitical risk premium in the oil market.
  • Above parity, NOKSEK sees clustered resistance at the 1.0016 (200-day EMA) and 1.0029 (Nov 2 high), with 1.0115 seen further out (61.8% fib. retracement of the 7 Aug - Dec 13 price swing).
  • A reminder that lower-than-expected December CPI on Wednesday did not prompt a meaningful reaction in NOK, with the Norges Bank firmly expected to remain on hold on Jan 25.
  • Next week's local docket is also light, with monthly GDP data on Tuesday the main point of interest. This leaves NOK likely to trade as a function of global flows/cross-market moves over the next few days.

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