Thursday, May 12, 2016

Nordic Battleground: Norwegian Krone Breaks Out (NOKSEK)

It's about time.
NOK?SEK 1.0066 up .96%
From Saxo Bank's Trading Floor blog:

#SaxoStrats: Trading the NOKSEK breakout

NOK is sharply stronger this morning on the Norges Bank meeting and the initial release of Q1 Norwegian GDP, which came in far stronger than expected. 

Also helping NOK firm here is a strong rally in energy prices, with Brent crude near the highs of the recent cycle. Elsewhere, the most negative yielding currencies in Europe have weakened notably in recent market action, especially SEK and CHF. 

Technically, the NOKSEK pair has clearly focused on the parity level as an important resistance level that has held a couple of times in recent months but has been taken out in the wake of today’s developments. We trade the break in anticipation of the market changing its attitude on the relative merits of the two currencies and encouraged by fundamental developments today.
Management and risk description
The key risk to this trade is that commodity prices fall sharply again – particularly oil, as Norway and its currency are heavily exposed to energy prices.