Mapping the Market: Euro's rally against Norwegian krone may be running out of road

The euro's recent momentum against the Norwegian krone may be losing steam, with charts indicating a potential return to a long-term downtrend after a brief bounce in late May.

Until recently, the euro appeared to be on a roll ​against the Norwegian krone, but charts are warning that ​the single currency could be losing ‌momentum and ​at risk of reverting to a long-term downtrend. Click here for a more detailed chart.

After sliding sharply from December 2025, the euro caught a break in late May, lifted ‌in part by hopes for a peace deal between Iran and the United States. That optimism pushed the euro to a 2-1/2-month high of 11.1690 krone, according to LSEG data. The Norwegian krone is sensitive to changes in oil prices — rising crude tends ‌to strengthen the krone against other currencies — so any easing of Middle East tensions that weighs on oil can ‌work against the currency. But the euro's bounce quickly ran into trouble. It failed to break through structural resistance near 11.20, a level that has acted as both a ceiling and a floor at various points in the past, and which also aligns with a key Fibonacci retracement. Traders use Fibonacci ⁠levels — mathematical ​ratios derived from a sequence of ⁠numbers — to identify price points where a market is likely to stall or reverse after a big move.

Making matters worse, a technical gauge called ⁠the Relative Strength Index, or RSI, sent a cautionary signal. Even as the euro hit its recent peak, the RSI failed to follow ​suit, a pattern known as divergence. Technical analysts take this divergence as a sign that the market lacks the ⁠momentum to sustain gains. The clock is now ticking. The longer the euro struggles to push convincingly above 11.20, the more traders will eye a potential slide back ⁠to ​10.6990, the 3-1/2-year low struck last month. A drop through that floor would suggest the euro's longer-term downtrend against the krone is firmly back in charge. A first warning sign of such a scenario would be a fall below the ⁠10.9050-10.9200 area.

What the chart shows: (Daily markets commentary from Reuters analysts on the signals financial charts are sending - and what they ‌might mean.) (Christopher Romano is ‌a Reuters market analyst. The views expressed are his own; Editing ​by Burton Frierson and Padraic Cassidy)