EUR/NOK still bearish longer term – Danske Bank

In view of Analyst at Danske Bank Aila Mihr, the Norwegian Krone is expected to gather traction in the longer term.

Key Quotes

“Despite strong domestic data out of Norway (retail sales + NAV labour market report) and the oil price gaining, EUR/NOK traded higher on Friday”.

“While part of the move can be explained by NOK/SEK flow as the strong GDP print out of Sweden triggered NOK/SEK selling, we also note that positioning, technicals, short-term valuation and the outlook for a more challenging data calendar in coming weeks (inflation, house prices) had increasingly become NOK headwinds”.

“Hence, while we remain bearish EUR/NOK, we are side-lined for now as we think better entry levels for short strategic EUR/NOK positions are likely to emerge over the next month. As of now, a level around 9.40 seems attractive to us for re-entering a new short position”.