EURNOK: From A Techno-Fundamentalist's View - April 2021EURNOK: From A Techno-Fundamentalist's View
Fundamentals:
Norway is an export-dependent economy and her currency is effected by oil. OIl prices and Norway's inflation remain strong, but not overheated. This is almost a goldilocks zone to support the thesis for a greater expectation that Norway's central bank will maintain a further hawkish stance for their monetary policy. A stronger NOK means that inflation risks will be dampened and the CPI-ATE (consumer price index adjusted for tax changes and excluding energy products: www.ssb.no) will stay lower. This is a stable environment for this export-dependent central bank's current sentiment and moves.
Furthermore, another contributive thought that will influence the NOK currency is that September 2021 will be the time Norway will have elections. Thus, there will be more fiscal spending along the way by the government.
When it comes to the Euro-zone, money will keep the central bank at bay with its current plans with little activism. The EUR currency is weak and its central bank prefers to keep things the same as it is. The Euro-zone itself prefers not to take fiscal measures as the USA has done to give its economy the same thrust. There is good inflation and its equity market is rising. The idea of "why fix what is not broken prevails.
Technicals:
A sustained trend from March 2020 continues to be in play. Any pullback has been an opportunity to take a sell position.
Currently, another pullback seems to be failing again.
MACD still bearish
RSI still bearish
