EUR/NOK expected to gather traction in the longer run – Danske Bank

Mikael Milhoj, Analyst at Danske Bank, believes NOK could weaken further in the longer term and thus support a bull run in the cross.

Key Quotes

“The Scandi divergence continues where the downside momentum in EUR/NOK looks strong while the SEK still looks fragile”.

“A break of the low in EUR/NOK from 4 October at 8.9013 would take the cross to unchartered territory and would indeed represent a challenge to our call for a rebound up to 9.20 in three months’ time”.

“However, OPEC talks on a supply cut display a need for high US oil stocks. We see a risk of the oil price being tilted to the downside in coming months and we still think that the latest developments in Norwegian data, speculative NOK positioning and NOK seasonality are factors that are likely to support the cross in coming months”.