EUR, NOK, We, Just, Like, Norway, Fundamental Analysis, fx trader, forex

The Euro has had a positive couple of days following an update from the ECB in which Mario Draghi basically said nothing – no news being neither good news nor bad news – but the Norwegian Krone is due some downside with the Norges Bank intent on easing monetary policy due to a tepid economic growth outlook. Since late 2014, Norwegian rates have come down by 100bp. The central bank last cut rates in March this year and delivered an outlook that suggested another in H2 – which is what we’ve just entered.

Eurozone policy simply cannot get any easier – the ECB has already adopted negative interest rates. The Norges Bank has yet to do so and has said that it’s ready to consider it. The NOK is not seen as a safe haven currency – even if it may indeed provide some shelter from global tumult (this is Norway after all) and thus many may see it as a calmer, more predictable reactor to domestic macroeconomic drivers. Anyone who’s attempted to trade the Euro or indeed the German DAX off the back of Mario Draghi’s words will know what I mean.

A Donchian channel breakout yesterday is encouraging to bulls, and if the 200-day moving average now holds as support, then upside may well prevail through the 50% Fibonacci retracement level and at least as far as the upper Bollinger band 9.463.

Augustin Eden 
Research Analyst
Accendo Markets

CFDs, spread betting and FX can result in losses exceeding your initial deposit. They are not suitable for everyone, so please ensure you understand the risks. Seek independent financial advice if necessary. Nothing in this article should be considered a personal recommendation. It does not account for your personal circumstances or appetite for risk.