Norges Bank unlikely to rock the NOK's boat
Repeat with change to second line
Jan 18 (Reuters) -The Norwegian crown has been on a recovery path versus the euro since Jan. 12 and despite the choppy nature of the rally todays's Norges Bank rate decision is unlikely to add to the volatility.
Having hiked its key rate to 2.75% in December and with little change fundamentally, a no change decision is expected. Inflation remains high and the central bank is likely to monitor the economy this month and in February before possibly taking rates higher in March.
The Norges Bank will take its foot off the accelerator and data releases will determine if another rate hike is needed after a March move to 3.0%. A terminal rate of 3.25% possible and for the tightening cycle to extend to 3.5% the inflation rate will have to jump.
Key support levels for EUR/NOK are at 10.5912, a 50% Fibonacci retracement taken off the 10.2130-10.8250 Dec. 1-Jan. 5 climb, and 10.5415 Jan. 10 low. A daily trend support line taken off the Dec. 1 10.2130 low also in the mix at 10.5768.
For more click on FXBUZ
EUR/NOK daily candle chart: https://tmsnrt.rs/3Wi3oXi
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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