EUR/NOK reverses the weekly up move and recedes to 9.6600
- EUR/NOK met important resistance in the 9.7100 area.
- Rising crude oil prices give support to the Krone.
- Norway unemployment rate ticked lower to 3.2%during April.
The Norwegian Krone has recovered some shine on Wednesday and is now dragging EUR/NOK to the area of 9.6600, or session lows.
EUR/NOK looks to data, oil
NOK is reversing part of the negative start of the week, retreating to the 9.6600 region on the back of solid labour market data, rising crude oil prices and a broad-based improvement in the risk-associated universe.
In fact, today’s Labour Force Survey (LFS) showed that the unemployment rate dropped to a seasonally-adjusted 3.2% during April, with the employed persons rising by 14K.
In addition, prices of the European benchmark Brent crude are now retreating from tops beyond the $66.00 mark per barrel although they keep the firm tone intact and are already rising more than 11% since recent lows in the psychological $60.00 neighbouhood.
Recent labour market figures added to the solid fundamentals in the Scandinavian economy and at the same time reinforce the hawkish stance from the Norges Bank, which is expected to hike rates once again in Q3. The better tone in the riskier assets is also supporting the Krone today, while any progress from the potential Trump-Xi meeting at the G-20 event could lend extra oxygen to the currency.
What to look for around NOK
The mood around the risk complex, Brent-dynamics, a healthy economy and a hawkish central bank continue to be the main drivers for the Norwegian currency for the time being. Recent results from the Regional Network Survey showed fundamentals in the Nordic economy remain pretty solid, reinforcing the case of further tightening by the Norges Bank in the upcoming months as well as a stronger Krone.
EUR/NOK significant levels
As of writing the cross is up 0.30% at 9.6707 and faces the next up barrier at 9.7234 (55-day SMA) seconded by 9.8318 (monthly high Jun.11) and then 9.8761 (monthly high May 10). On the other hand, a breach of 9.6460 (low Jun.21) would expose 9.6221 (78.6% Fibo of the April-May rally) and finally 9.5896 (monthly low Mar.21).