Forex Market: EUR/NOK daily trading forecast

Yesterday’s trade saw EUR/NOK within the range of 8.1537-8.2180. The pair closed at 8.2095, gaining 0.50% on a daily basis.

At 6:23 GMT today EUR/NOK was up 0.01% for the day to trade at 8.2079. The pair broke the first key weekly resistance and touched a daily high at 8.2124 at 6:10 GMT.

Fundamental view

Euro zone

Annualized industrial production in the country probably contracted 0.1% in July, according to expectations, following a 2.0% drop during the preceding month. Annual industrial output in France has been shrinking since January. The index reflects the change in overall inflation-adjusted value of output in sectors such as manufacturing, mining, utilities, with the exception of recycling.

French annualized manufacturing production, which accounts for almost 80% of total industrial production, expanded 0.1% in June. In monthly terms, the index probably dropped 0.3% in July, after a 1.6% climb in June compared to May. This indicator is considered as causing a greater influence on the currency market. In case manufacturing output decreased more than projected, this might lead to a sell-off in the euro. The National Institute for Statistics and Economic Studies is to publish the official numbers at 6:45 GMT.

Norway

Norway’s annualized index of consumer prices (CPI) probably slowed down to 2.1% in August from 2.2% in July, as the latter has been the highest annualized inflation level since January. In monthly terms, the index probably fell 0.3% last month, following a 0.7% increase in July. It reflects the change in the general level of prices of over 650 goods and services, which the population acquires, uses or pays for consumption. In case the CPI decelerated more than expected, this would have a bearish effect on the krone.

Nation’s annualized core CPI (CPI-ATE) probably fell to 2.4% in August from 2.6% during the prior month. This indicator is comprised by two main components – CPI-AE, which excludes energy costs and prices of raw materials, and CPI-AT, which is based on real current prices adjusted for taxes. CPI-ATE is the indicator, used by Norges Bank in order to set its interest rate policy. A lower than expected core CPI would lead to a sell-off in the national currency, as this reduces the probability of a rate hike. Statistics Norway is to release the official report on consumer inflation at 8:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 8.1937. In case EUR/NOK manages to breach the first resistance level at 8.2338, it will probably continue up to test 8.2580. In case the second key resistance is broken, the pair will probably attempt to advance to 8.2981.

If EUR/NOK manages to breach the first key support at 8.1695, it will probably continue to slide and test 8.1294. With this second key support broken, the movement to the downside will probably continue to 8.1052.

The mid-Pivot levels for today are as follows: M1 – 8.1173, M2 – 8.1495, M3 – 8.1816, M4 – 8.2138, M5 – 8.2459, M6 – 8.2781.

In weekly terms, the central pivot point is at 8.1353. The three key resistance levels are as follows: R1 – 8.1838, R2 – 8.2332, R3 – 8.2817. The three key support levels are: S1 – 8.0859, S2 – 8.0374, S3 – 7.9880.