OVERVIEW – Norwegian consumer confidence has already come out today and has come in much softer than expected. However, the data has hardly weighed on the NOK, with the single currency outperforming on the day and only lagging behind the antipodeans. The SEK is also a top performer, right behind the NOK, and it will be interesting to see how the Swedish markets respond to today’s unemployment data. Overall, the general direction of the regional markets will continue to be predicated on the direction and sentiment of the broader global macro markets, with any additional deterioration and escalation in risk aversion likely to weigh.
Eur/Sek Despite the continued downside pressure to fresh 2010 lows by 9.50, longer-term technicals show room for plenty of corrective upside. We do not recommend buying at current levels right now, but would instead wait for a dip below 9.50 to look to buy, or waiting for a bounce and looking to buy an upside break. Any additional downside from current levels should be limited.
Eur/Nok A very well defined bear channel dating back to mid-2009 looks to have finally been violated, with the market rallying sharply back above 8.00 and suggesting that a key low has been set down by 7.67, in favor of additional gains over the medium-term back towards the 8.40-50 area. We would recommend looking for opportunities to buy below 8.00.
Usd/Sek The market continues to extend gains to fresh 2010 highs, with the price rallying towards 8.15 thus far before stalling out. For now, there is some risk for a pullback to allow for short-term studies to unwind, but any setbacks are expected to be well supported ahead of 7.40, in favor of the next upside extension towards 8.50 further up.
Usd/Nok The market continues to extend gains to fresh 2010 highs, with a test of next key barriers by 6.80 seen over the coming sessions. For now, there is some risk for a pullback to allow for short-term studies to unwind, but any setbacks are expected to be well supported ahead of 6.20, in favor of the next upside extension beyond 6.80 and towards 7.00 further up.
Gbp/Nok As mentioned in previous commentary, we had been looking for a weekly close above 9.50 to confirm a medium-term base and likely open a fresh upside extension towards 10.00 over the coming weeks. The confirmed close should now open said upside extension, with any setbacks expected to be very well supported ahead of 9.35.
Nok/Jpy Had been well confined to a very choppy range trade over the past several months, largely defined between 14.00 and 16.50. However, the lower end of this range has now been broken, with the cross dropping to trade below 14.00. This now opens the door for a retest of the key multi-year lows from early 2009 by 12.00.
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