Forex Market: EUR/NOK daily forecast

During yesterday’s trading session EUR/NOK traded within the range of 8.3818-8.4166 and closed at 8.3819, losing 0.2% on a daily basis.

At 6:58 GMT today EUR/NOK was up 0.11% for the day to trade at 8.3930. The pair touched a daily high at 8.4000 at 6:00 GMT.

Fundamental view

Euro zone

At 11:45 GMT the European Central Bank (ECB) is to announce its decision in regard to borrowing costs. The median estimate by experts suggests that the central bank will probably maintain its benchmark interest rate at the record low level of 0.15% at the policy meeting today. The ECB cut borrowing costs by 0.10% at its meeting on June 5th. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank is dovish about inflationary pressure in Euro zone’s economy and thus, either puts interest rates on hold, or reduces them, this will usually have a bearish effect on the common currency.

The interest rate decision will be followed by a press conference of the ECB President Mario Draghi, at which he will take a statement on monetary policy. During this event volatility of euro crosses is usually high. In case Draghi offers a more hawkish tone, the euro will usually receive support, while a more dovish tone will have a bearish effect on the currency. The press conference is scheduled at 12:30 GMT.

Norway

Manufacturing output in Norway, an indicator measuring the change in the total inflation-adjusted value of production by manufacturers, probably widened 0.3% in June, according to the median estimate by experts, following a 0.3% drop in May. Annualized manufacturing output increased 2.4% in June. Manufacturing production accounts for almost 80% of total industrial production, as the latter is a dominant segment of country’s economy. In case output expanded more than projected, this would have a bullish effect on the krone. Statistics Norway will release the official figures at 8:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 8.3932. In case EUR/NOK manages to breach the first resistance level at 8.4051, it will probably continue up to test 8.4282. In case the second key resistance is broken, the pair will probably attempt to advance to 8.4399.

If EUR/NOK manages to breach the first key support at 8.3705, it will probably continue to slide and test 8.3586. With this second key support broken, the movement to the downside will probably continue to 8.3355.