Norwegian Krone Falls as Technical Gauges Signal Gains Excessive
Norway’s krone weakened for the first time in four days against the euro after technical gauges signaled the rally that pushed it to the strongest level in more than nine years was poised to stall.
The krone depreciated the most against the dollar among the greenback’s 16 major counterparts.
Norway’s currency “has gone very fast and we have certainly entered territory now where the risk of a temporary correction is increasing,” said Kasper Kirkegaard, a senior currency strategist at Danske Bank A/S (DANSKE) in Copenhagen. “For the medium-term outlook, we are still very positive on the Norwegian economy and the krone.”
The Norwegian currency fell 0.3 percent to 7.2879 per euro at 4:33 p.m. London time after appreciating to 7.2585 yesterday, the strongest level since January 2003. The krone dropped 0.9 percent to 5.9304 per dollar.
The currency’s so-called 14-day relative-strength index against the euro climbed to 70.5 yesterday, above the level of 70 that some traders use as an indicator that an asset has risen too quickly and is poised to decline.
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