USD / NOK Lows Higher After Strong Norwegian Retail Sales Data
USD / NOK edged higher on Monday, even after relatively strong Norwegian retail sales figures. The focus is on the upcoming OPEC + meeting and the US non-farm payroll figures. It is trading at 8.5083, around 0.67% above last week’s low.
Retail sales in Norway
The Norwegian economy is expected to continue to do well as the country ramps up its vaccination campaign and oil prices rise. Published data Monday showed the nation’s retail sales surged in May. Overall sales rose 5.8% year-on-year after increasing 0.4% the previous month.
As in most European countries, clothing was the biggest contributor to strong sales as people started to travel. Clothing and furniture stores increased while grocery stores and e-commerce declined. In total, retail sales grew 5.4% from May 2020 to May 2021.
Other economic data from Norway has been relatively strong. Industry and services PMIs jumped while household consumption increased. Norwegian inflation, on the other hand, eased slightly.
ING analysts expect the USD / NOK pair to react at the next OPEC + meeting. In it, leaders will deliberate on what to do now that the price of crude oil has risen. Brent rose to over $ 75 while West Texas Intermediate (WTI) rose to $ 74. Some analysts expect members to start ramping up production by about 500,000 barrels per day.
The OPEC + meeting is important for the USD / NOK as Norway is a major exporter of crude oil. The country exports more than 1.1 million barrels per day. As such, the Norwegian krone does well when the price of oil rises. ING analysts noted:
“We expect the EUR / NOK to end the year at 9.80 and the NOK to be one of the few currencies to make any gains against the dollar – even with the Fed becoming a bit more indecisive. “
The pair will also react to the latest US non-farm payrolls that come out on Friday. The figures should show that the economy created more than 200,000 jobs in June while the unemployment rate fell to 5.7%.
USD / NOK technical analysis
The USD / NOK has fallen significantly in recent days. It went from 8.7177 to 8.5172 today. On the four-hour chart, the pair is stuck at the 25- and 50-day Weighted Moving Averages (EMAs). It is also slightly above the important support which is shown in blue. This support links the highest levels in May. The Relative Strength Index (RSI) has also moved from the overbought level of 85 to 50. As a result, the pair may continue to move lower as the bears target the next support at 8,400.
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