NOK remains strong – Danske Bank

Aila Mihr, Analyst at Danske Bank, noted the outlook on theNorwegian Krone stays constructive for the time being.

Key Quotes

“Although retail sales out of Norway on balance disappointed on Monday, the EUR weakness also sent EUR/NOK below the 2016 bottom of 8.90”.

“This leaves the cross in technically unchartered territory. The break of the 2016 bottom probably also explains yesterday’s NOK outperformance versus SEK”.

“Fundamentally, the latest move lower in EUR/NOK seems overdone, according to our models. However, given the technical break, we could see more nearterm NOK gains as long as the EUR does not erase its losses. We target EUR/NOK at 9.00 and 8.90 at 1M and 3M, respectively”.