We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • LIVE IN 30 MIN: Currency Strategist @PaulRobinsonFX discusses important technical developments relevant to short to intermediate-term commodity and equity index traders here - https://www.dailyfx.com/webinars/816147795?CHID=9&QPID=917720
  • ECB's De Guindos says monetary policy side effects are becoming more evident $EUR
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/10:30 AM GMT to gain insight on indices and commodities for the active trader. Register here: https://t.co/gghsFsZYlx https://t.co/ujAbNhzLpz
  • Why financial market traders must monitor both monetary and fiscal policy?Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/gbDTCgqHI5
  • Heads Up:🇬🇧 GBP Unit Labor Costs (YoY) (2Q) due at 09:30 GMT (15min), Actual: N/A Expected: N/A Previous: 2.1% https://www.dailyfx.com/economic-calendar#2019-11-20
  • RT @mynamejd: SP500 earnings revisions up & down per sector - Source Refinitiv https://t.co/bvmlQCltkN
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.87%, while traders in US 500 are at opposite extremes with 79.99%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/06877Dk0Iz
  • Heads Up:🇪🇺 EUR ECB Publishes Financial Stability Review due at 09:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2019-11-20
  • Commodities Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Gold: 0.37% Silver: 0.22% Oil - US Crude: -0.49% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/Nl2cW4qqNE
  • US Dollar Selloff May Accelerate After #FOMC Minutes Released - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2019/11/20/US-Dollar-Selloff-May-Accelerate-After-FOMC-Minutes-Released.html
SEK, NOK Brace for ECB Rate Decision, Brexit Turmoil, Iran Risks

SEK, NOK Brace for ECB Rate Decision, Brexit Turmoil, Iran Risks

2019-09-09 03:30:00
Dimitri Zabelin, Junior Currency Analyst
Share:

NOK, SEK, Iran Risk, Brexit, ECB Rate Decision – TALKING POINTS

  • Swedish Krona, Norwegian Krone brace for volatility as political risks mount
  • All eyes will be on the ECB rate decision and commentary from Mario Draghi
  • OPEC + talks, Brexit peril, Iran negotiations may cause cross-asset volatility

Learn how to use political-risk analysis in your trading strategy!

The Norwegian Krone and Swedish Krona are expected to be the most active G10 currencies – along with GBP – ahead of a politically-packed week. The ECB rate decision and ongoing Brexit negotiations will likely headline as the two major event risks for the week, though traders may not get a break from high-profile event risk amid a slew of key meetings across the world. Cross-asset volatility is to be expected.

ECB Rate Decision: Will Draghi Surprise Less Dovish?

Slower regional growth against the backdrop of ongoing Brexit negotiations and the US-China trade war has undermined upside inflationary pressure in the Eurozone. This has prompted the ECB to shift its rhetoric and has hinted it is not only considering cutting rates but also re-introducing QE. The central bank only recently retired it bond-buying program in December, though prevailing conditions may now require it to be reinstated.

But there is a chance that while the central bank will deliver stimulative policies, it may fail to meet the market’s lofty expectations. As such, if Mario Draghi’s commentary falls short, it could cause a pullback in equities and potentially send the Euro higher against its major counterparts. Euro-Nordic crosses in particular may rise if the less-than-dovish outlook pulls capital away from EU perimeter countries and into the core.

Brexit: When Will it End?

As outlined in my GBP forecast, Brexit negotiations this week will likely be a major catalyst for regional volatility as the political entanglement continues to engulf policymakers and traders into a void of confusion. Over the weekend, Pension Secretary Amber Rudd resigned, adding to the list of Tories who have rebelled against the government or were fired for attempting to prevent a no-deal Brexit.

There are growing concerns now that UK Prime Minister Boris Johnson might attempt to circumvent a law passed last week that requires him to ask the EU for an extension if he cannot deliver a deal by October 19. Failure to comply with the mandate could lead to a legal battle that may amplify regional volatility and weigh on cycle-sensitive currencies like the Swedish Krona and the Norwegian Krone.

How Will OPEC + Side Talks at World Energy Congress, Impact NOK, Crude Oil Prices?

At the World Energy Congress in Abu Dhabi, key members of OPEC + are expected to hold side talks as crude oil prices continue to slide and are down almost four percent since the beginning of August. Souring sentiment over trade wars and geopolitical uncertainty have pressured crude oil prices and the US’s explosive shale production has contributed to the over-saturated market.

Crude Oil Prices, NOKSEK, Norway OBX Index – Daily Chart

Chart showing Crude oil prices

Crude oil prices chart created using TradingView

Iran Risks Escalating

On Sunday, US officials stated that anyone who purchases Iranian oil or engages in business with the Revolutionary Guard will face sanctions, and that no new oil waivers will be re-issued. While typically these supply-disruption risks would buoy crude oil prices, the overwhelming backdrop of weakening fundamentals has sapped the potency of politically-induced spikes. But the conflict may spill over into EU-US relations.

Want to learn more? Be sure to follow me on Twitter @ZabelinDimitri.

EURNOK Breaks 2-Month Rising Support

EURNOK was climbing along a two-month rising support channel before it broke below it at the end of August and has since shaved off over one percent. However, zooming out to a weekly chart shows the pullback is noticeable but not threatening to break the six year-rising support zone. The pair may continue to experience a brief retreat, though a less-than-dovish ECB may help trim some of the losses.

EURNOK – Daily Chart

Chart showing EURNOK

EURNOK chart created TradingView

EURNOK – Weekly Chart

Chart showing EURNOK

EURNOK chart created TradingView

EURSEK Gaps Lower, Breaks Key Support

EURSEK gapped lower by over half a percent at the start of the week and broke below a critical support range between 10.6649-10.6414. If the pair closes below support-now-turned resistance with follow-through, it could result in an aggressive selloff. However, technical set ups this week involving the Euro may be subject to radical shifts because of the enormity of the upcoming ECB rate decision.

EURSEK – Daily Chart

Chart showing EURSEK

EURSEK chart created TradingView

NORDIC FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.