- EUR / NOK extends lower to the 10.0600 area.
- Norges Bank raised the policy rate to 0.25%, as expected.
- The bank’s rate path signals another hike in December.
The Norwegian Crown is even more appreciated compared to its European counterpart and drags the EUR / NOK to new 3-month lows near 10.0600.
EUR / NOK weaker after Norges Bank
EUR / NOK lost ground for the third consecutive session on Thursday, this time the catalyst for the additional NOK purchase was Norges Bank.
In fact, the Scandinavian central bank is the first G10 central bank to start tightening its monetary conditions after the pandemic. The updated rate trajectory now sees another hike at the December meeting followed by three more hikes during 2022. Therefore, the policy rate is estimated at 1.75% by the end of 2024, closer to the bank’s vision of the neutral interest rate.
The NOK upward movement is also derived from the support of a higher NIBOR, which is navigating the area last seen in January around 0.51%.
Technical levels
At time of writing, the cross is shedding 0.34% at 10.0780 and is facing the next resistance at 10.2422 (200-day SMA) followed by 10.2812 (weekly high on Sept. 20) and then 10.3223 (monthly high on Sept. 8). On the other hand, a break of 10.0642 (monthly low of September 23) would open the door to 10.0403 (monthly low of June 8) and finally to 9.9004 (low of April 29).
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