We want to sell EUR/NOK on rallies - Danske Bank

Below is the extract of Danske Bank's daily research report, where Aila Mihr, Analyst at Danske Bank Markets, provides a brief outlook on the EUR/NOK pair.

Key Quotes:

"stabilising risk sentiment and important technical levels versus SEK, USD, EUR were the reasons for yesterday’s initial EUR/NOK setback above 8.87. The government’s proposal of capping the use of oil money is on balance NOK negative news, both directly and indirectly, but asthe 3% limit on the oil fund use would but mirror this year’s projected spending, it had little market impact. Also, the proposal makes a reduction in the inflation target to 2.0% (from 2.5%) more likely, which in itself would be NOK positive. Norges Bank’s Governor Olsen’s annual address, which followed the government’s announcement, gave – as expected – no hints about the near-term future of monetary policy. Overall, we want to sell EUR/NOK on rallies and are inclined to sell in the low 8.90s around the 10-13 February highs."