Forex: EUR/NOK jumps on Olsen comments

The Norwegian krone is sharply depreciating against the euro after Norges Bank’s Olsen joined the ‘currency wars’ fashion, signalling that the central bank is ready to counteract any undesirable strength of the NOK. The cross jumped from the area around 7.3500 to levels just shy of 7.4100 soon after the comments.

Olsen also hinted at the likeliness of a rate cut should the economic activity stagnates. However, the possibility of a rate cut remains blurred by the high level of household debt and house prices.

At the moment, the pair is up 0.51% at 7.4070 with the next hurdle at 7.4680 (high Feb.1) and then 7.4770 (2013 high Jan.18).
On the downside, a break below 7.3530 (low fev.14) would bring 7.3415 (high Jan.4) and then 7.3123 (Lower Bollinger).