EURNOK advances to 10.37 after Norges Bank, which had opted for hikes of 50 basis points at previous rate meetings, hikes by 25 bps. Economists at Société Générale analyze the pair's technical picture.

Norges Bank hikes rate by 25 bps

“Norges Bank raised the policy rate by 25 bps to 2.50%. A similar increase is on the cards in December. In the statement, the bank says there are signs that some areas of the economy are cooling down, and prospects for lower-than-expected freight and energy prices may curb inflation ahead. The 225 bps of increases since last December is beginning to have a tightening effect on the economy and this requires a gradual approach.” 

“A short-term pullback is taking shape; a revisit of the 200-DMA near 10.05 is not ruled out. This is first layer of support. In case the pair fails to defend this MA, a deeper downtrend is likely towards 9.91 and the lower band of the channel at 9.72/9.70.”

“Short-term resistance is at 10.56, the 76.4% retracement of recent pullback.”