EUR/NOK re-enter shorts around 9.40 – Danske Bank

Analyst at Danske Bank Aila Mihr suggested the area around 9.40 in EUR/NOK as a good entry point for shorts.

Key Quotes

“In the Scandies, it was interesting to see how EUR/NOK moved higher despite oil trading flattish and no news on the data side”.

“As such, price actions support our view that the recent NOK rally has become a bit stretched. We still hold the view that positioning, technical and short-term valuation have increasingly become NOK headwinds, and we think better entry levels for short strategic EUR/NOK positions are likely to emerge over the coming month”.

“As of now, a level around 9.40 seems attractive to us for re-entering a new short position”.

“In terms of data releases out of Norway, house prices due out on Thursday will be watched closely for any further signs of weakness. House prices have dropped for the past three consecutive months (April-June) and further declines could prompt speculation that Norges Bank will need to provide further stimulus”.