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NOK drops as Norway heads to the polls

Summary:

  • Polling stations open in Norway for electoral race
  • Anticipated to be the closest in decades
  • NOK falling lower. USDNOK (+1.0%)

The Norwegian election is widely expected to be very close, with many experts believing the race for the next prime minister is too close to call. The two front runners are Erna Solberg, the incumbent Conservative prime minister and her Labour rival, Jonas Gahr Store. 

Latest opinion polls indicate an extremely close race, with an aggregate suggesting that just one seat may separate the parties in Norway’s 169-member parliament. Solberg’s Conservative party has been the leader of a coalition government since the last election in 2013, but millionaire Jonas Gahr Store and his labour party who pledge to raise taxes on Norway’s highest earners are now neck and neck in the race. 

Voting opens at 9am local (8am BST) local time and will close at 9pm (8pm BST).   

The uncertainty surrounding the event can be seen in the Norwegian Krona with the currency dropping strongly on the day against its peers. Let’s look now at both the EURNOK and the USDNOK and see what the technical situation is at present.

EURNOK broke out above a falling trendline last week and the market could now be set for a move higher. 9.390 has been capping any advances in the past couple of months, but should price break above here then a breakout rally may occur. 9.440 is the first level to look to above 9.390 if there is a breakout but if this fails to halt a move higher then price may revisit year-to-date high at 9.628.   

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 EURNOK broke above a falling trendline last week and if it can move above 9.390 then further gains are possible. Source: xStation

USDNOK is similar to EURNOK in that it has been declining in the past few weeks, although the declines in USDNOK are far larger in scale. After hitting a 2017 high of 8.710 back in May the market has made a substantial decline, falling to a low of 7.700 last Friday. There is a possible base forming however, with buyers stepping in on several occasions and defending the area around 7.700 on numerous occasions in the past couple of weeks. As long as the low holds then a recovery could lie ahead with fib retracements of the decline offering possible targets. The 23.6% at 7.940 is the first level longs may be looking towards, but if price can move above there then the 61.8% at 8.329 becomes possible. This is also an interesting area as it coincides with a prior swing support which temporarily halted the decline at the end of May and start of July. 

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USDNOK has fallen hard since making a high of 8.710 back in early May. Could a recovery rally lie ahead though? Source: xStation

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