In March this year, in an article named, “FxWirePro: Buy Krone against euro targeting 8.86 per euro”, available at https://www.econotimes.com/FxWirePro-Buy-Krone-against-euro-targeting-886-per-euro-1207093 we suggested going long on the Norwegian krone against the single currency citing a change in stance by Norges Bank, which in its March monetary policy, not only revised its inflation target from 2.5 percent to 2 percent but signaled the possibility of a rate hike after summer. "As we look at the outlook and the risk picture, the key rate will most likely be set up after the summer of this year," said Øystein Olsen, Governor of the Central Bank.
We suggested, “Sell EUR/NOK at the current rate of 9.5 with the stop loss around 10 area and with a target of 8.86 area.” Though the call hasn’t returned profits yet, we remain committed to the call. Since March, the oil price has firmed further, which is likely to be a positive for our trade going ahead. We expecting the European Central Bank (ECB) to be more dovish than the Norges Bank and expecting the market to start pricing that going ahead.
In this follow-up article, we would like to add the following interim targets to out short EUR/NOK call,
Target 1 - 9.36
Target 2 - 9.20
Target 3 - 8.98
Final Target - 8.86
We would like to recommend profit bookings of 20 percent at the each of the above interim targets. The pair is currently trading at 9.618 area.
