EUR/NOK could test the lower end of its weekly range
Nov 8 (Reuters) -Loss consolidation has been the theme for Norway's crown for the bulk of this year and the longer-term outlook might hold little promise but there could be potential for a recovery into the turn of the year.
It has been a strong week for the crown versus the euro having negotiated central bank meetings, a presidential election, and a volatile oil price. EUR/NOK peaked at 11.9930 last week and is set to close this week at levels in the 11.70s.
EUR/NOK has breached the 12.00 level several times since May 2023 but a close above this point has proved elusive. With this line in the sand attracting sellers the cross might explore the lower end of its 16-week range, 11.6510, before the year is out.
The 100-week moving average has supported EUR/NOK, on a closing basis, since September 2022 and could also provide a pullback target. The average is currently at 11.4825. The weekly Ichimoku cloud top, ahead of the average, offers further support at 11.6040.
If the Trump presidency brings inflation back to the table the NOK is likely to suffer in 2025 and further tests of the 12.00 level versus the euro shouldn't be ruled out. However, for the near-term there might be scope for NOK appreciation.
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EUR/NOK weekly candle chart: https://tmsnrt.rs/4fueItk
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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