NOK: Has the train left already? – Nordea

Analysts at Nordea Markets suggest that less uncertainty surrounding the trade war and Brexit have trumped negative effects from Norges Bank pulling out of the market and EUR/NOK has headed south towards levels not seen since the beginning of October.

• "In addition, oil prices are super bid supporting the NOK. While the oil price sensitivity is not what is used to be, it has been stable over the last couple of years. Further support to the NOK should be expected from current oil price levels. Chart 6 suggests levels right below 9.90 in the short term.
• Around the 9.90-level EUR/NOK should also face technical support from lows in August and end-September levels. The 200dmavg kicks in at 9.87. A 14d RSI at the lowest since October 2018 also suggests a pause in the EUR/NOK sell-off soon. If this materialises, we would like to position for further NOK strengthening into Q1 (we don't like to be long NOK over Christmas).
• Some of the positive seasonality effect in the NOK in Q1 has likely been taken out already. However, we still find good value in a long NOK/SEK position and have this as one of our top picks for Q1. According to the Regional network survey and PMIs, growth is slowing in Norway. However, in relative terms it looks a lot better than what's happening in Sweden. NOK should also be supported by favourable carry versus the SEK."