NOK buoyed by strong economic activity
A series of economic data from Norway on Friday pointed at a strong rebound in economic conditions. The economic calendar from Norway featured retail sales and PMI data, both surprising to the upside and raising doubts on why the Norges Bank had painted such a grim outlook on the economy when they surprisingly slashed their interest rates in March.
EUR/NOK slumped on Friday to 7.5905, and is down almost 0.70%. Price action turned in a bearish harami candlestick pattern on Thursday 29th and the high on Wednesday, of 7.6525 fell just short of attempting a break of the 100-day moving average, now by 7.6553. The pair also failed to close above a 61.8% fibonacci retracement of the move from December’11 high to March’12 low by 7.6505. A break lower than Wednesday’s low of 7.5874, would confirm the bearish reversal pattern and give scope to more declines towards the 50-DMA by 7.5628 and the 38.2% fibonacci level by 7.5513.
USD/NOK was also under pressure on Friday, falling around 1% to 5.6875. The pair has established a short-term bear trend line off March highs and cut below the 50 and 20-DMAs by 5.7267 and 5.717 respectively. A close below Wednesday 28th low of 5.6749 will pave the way for more declines towards March lows, by 5.5623. A break above the bear trend line around 5.7570 levels would negate the new bearish structure, and open upside targets by 5.8100, the 100 DMA.
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