The Norwegian Krone has been strengthening against its European counterpart since around the 2nd of May, when we saw a trend reversal to the downside. In the short run, the pair came under selling interest after it hit resistance at the downtrend line taken from the peak of the 2nd of May, but the slide was halted by the 9.443 support level.
For now, until the downtrend line is broken, we will remain bearish and aim for the recent lows again. A break below the 9.443 level could open the path towards the 9.397 area, marked by the lows of last week. Slightly below that lies the return line of the latest downtrend that could act as a strong area of support. Certainly, we could see a scenario, where EUR/NOK moves again towards the downtrend line and then retraces back down towards the previously mentioned levels.
Alternatively, a break above the downtrend line could interest more bulls in stepping in taking the driver’s seat. A good strong break through the 9.514 zone could open the doors towards the 9.514 or 9.540 levels. If the last level is not able to withhold the rate from rising, then we could potentially start aiming for the 9.608 mark, which was the 29th of May high.
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