EUR/NOK Higher As Norway’s Retail Sales Slump

NOK was the main loser among the G10 currencies this morning as Norway’s retail sales unexpectedly fell 1.3% mom in August, the second consecutive month of decline, indicating signs of a slowdown in the economy. The markets were expecting an acceleration of +0.2. The news echoes yesterday’s data from Sweden, which announced a 0.7% mom drop in retail sales in July vs +0.1% expected. Also, unemployment figure remained unchanged at 2.8% in August, vs market expectation of a small decline to 2.7%. The figures slightly increase the possibility of a rate cut at the Norges Bank’s next meeting on 19 September and hence were NOK-negative.

EUR/NOK moved higher this morning, trying to escape from the 8.088 (S1) level. The past few days the pair has been moving sideways in a trading range between the 8.0300 (S2) and 8.0880 (S1) boundaries and a clear break through the range’s ceiling will target the 8.1602 (R1) resistance level. It is worth noting that MACD’s and ADX’s readings favor the aforementioned scenario, since ADX crossed above 20 with the +DI lying above the –DI and MACD is trying to move away from its zero line.

Support: Support is found at the 8.0880 (S1) level, followed by 8.0300 (S2) and 8.0072 (S3) respectively.

Resistance: Resistance levels are at 8.1602 (R1), followed by 8.2234 (R2) and 8.2798 (R3), both identified from the weekly chart.

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