Yesterday’s trade saw EUR/NOK within the range of 8.4302-8.5367. The pair closed at 8.5207, gaining 0.96% on a daily basis.
At 7:24 GMT today EUR/NOK was down 0.05% for the day to trade at 8.5163. The pair touched a daily low at 8.5003 during early Asian trade.
Fundamentals
Euro zone
Manufacturing data – preliminary release
Frances manufacturing PMI probably remained in the zone of contraction for a seventh consecutive month in November, with the preliminary index estimate being at 48.8, acording to the median forecast by experts. The final PMI stood at 48.5 in October, as reported on November 3rd, up from a preliminary reading of 47.3. Values below the key level of 50.0 indicate that the majority of respondents in the survey expressed pessimism in regard to activity in the sector. Markit Economics is expected to release the official data at 8:00 GMT.
French preliminary services PMI probably slightly improved to 48.5 in November from a final reading of 48.3 in the prior month. If so, this would be the third consecutive month, during which the index inhabited the zone below 50.0. Markit will publish the preliminary data at 8:00 GMT.
German manufacturing PMI probably remained above 50.0 for a second consecutive month in November, with the preliminary index value improving to 51.5, from a final reading of 51.4 in October, as reported on November 3rd. If so, this would be the highest index reading since July, when the final PMI was reported at 52.4. The preliminary value is due out at 8:30 GMT.
Activity in German services sector was probably little changed in November, with the preliminary PMI climbing to 54.5 from a final reading of 54.4 in October. If so, this would be the eighteenth consecutive month, when the PMI stood in the zone of expansion. The preliminary data is to be released at 8:30 GMT.
Manufacturing activity in the whole Euro region probably improved in November, with the preliminary Purchasing Managers Index rising to 50.8 from a final value of 50.6 during the preceding month. If so, this would be the highest reading since July, when the final index was reported at 51.8, and also a seventeenth consecutive month of expansion. The PMI reflects the performance of the manufacturing sector in the area and is based on a survey of 3 000 manufacturing companies. National data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These member states together account for almost 90% of Euro zones manufacturing activity. The Manufacturing Purchasing Managers Index is comprised by five individual indexes with the following weights: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stock of Items Purchased (10%), as the Delivery Times index is inverted, so that it moves in a comparable direction. The preliminary data is expected at 9:00 GMT.
The preliminary services PMI in the Euro zone was probably little changed in November, reaching a level of 52.4. In October the final reading of the index was reported to have been at 52.3. If market expectations were met, this would be a sixteenth consecutive month, during which the index stood above the key level of 50.0. The PMI is based on data collected from a representative panel of around 2 000 private service sector companies. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland. The survey represents private sector conditions in terms of new orders, output, employment, prices etc. Markit will release the preliminary data at 9:00 GMT.
A larger-than-expected improvement in any of the PMI readings would certainly provide support to the common currency.
Consumer Confidence
Confidence among consumers in the Euro area probably improved in November. The preliminary value of the consumer confidence index probably rose to -10.7, or the highest since August, from a final reading of -11.1 in October, as reported on October 30th. The final index for September came in at -11.4. The indicator measures consumer confidence on a scale of -100 to +100. A reading of -100 suggests a lack of confidence, zero means neutrality and a reading of +100 indicates extreme levels of confidence. The index reflects the level of optimism, which consumers have about economic development in the region. The Business and Consumer Survey is conducted by phone and includes 23 000 households in the Euro zone. The questions asked stress on current economic and financial situation, savings intention and also on expected developments regarding consumer price indexes, general economic situation and major purchases of durable goods. This indicator is one of the five major components, that comprise the Economic Sentiment Indicator (ESI).
Higher confidence usually implies greater willingness to spend, including large-ticket purchases, while consumer spending is a key factor behind economic growth. Therefore, in case the gauge of confidence increased more than anticipated, this would cause a bullish impact on the euro. The European Commission is expected to release the preliminary data at 15:00 GMT.
Norway
Norwegian Gross Domestic Product probably expanded 0.3% during the third quarter of the year compared to the second quarter, after in Q2 economy grew 0.9%. The latter has been the fastest quarterly rate of growth since Q2 2013. Annualized GDP shrank 0.3% in the second quarter, after in Q1 economy expanded at an annualized rate of 3.9%, or the most since Q2 2012, when Norway registered a 4.7% growth.
The GDP represents the total monetary value of all goods and services produced by one nation over a specific period of time. Higher rates of growth suggest that interest rates may follow the same direction. Higher interest rates, on the other hand, will usually attract more investors, willing to purchase assets in the country, while, at the same time, this will increase demand for the local currency. Therefore, in case economic growth in Norway exceeded expectations, this would provide support to the krone. Statistics Norway is expected to publish the GDP report at 9:00 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 8.4959. In case EUR/NOK manages to breach the first resistance level at 8.5615, it will probably continue up to test 8.6024. In case the second key resistance is broken, the pair will probably attempt to advance to 8.6680.
If EUR/NOK manages to breach the first key support at 8.4550, it will probably continue to slide and test 8.3894. With this second key support broken, the movement to the downside will probably continue to 8.3485.
The mid-Pivot levels for today are as follows: M1 – 8.3690, M2 – 8.4222, M3 – 8.4755, M4 – 8.5287, M5 – 8.5820, M6 – 8.6352.
In weekly terms, the central pivot point is at 8.4585. The three key resistance levels are as follows: R1 – 8.5083, R2 – 8.5577, R3 – 8.6075. The three key support levels are: S1 – 8.4091, S2 – 8.3593, S3 – 8.3099.
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