The British pound traded higher against the Norwegian krone during the Asian session, extending gains for the third consecutive day following stronger-than-expected activity in the UK service sector.
On Monday, the final services PMI came in at 50.0 vs 49.1 expected in December, boosted by improving order books, a rise in new work, and stronger job creation.
A key event for the pound for the week is a meeting between Prime Minister Johnson and EC President Ursula von der Leyen in London. At the meeting, the UK is expected to kick-start negotiations on trade and future relationships between the UK and EU which will be a dominant driver of the pound’s performance in the New Year.
Any positive news after the meeting is expected to be pound positive, especially after the recent strong sell-off in the currency due to Johnson’s hardline stance on Brexit. To recall, Johnson announced there won’t be an extension of the transition period, which leaves the UK and EU with just 11 months to strike a complex trade deal.
Later today at 8:30 a.m. London time, the UK will release the Halifax HPI for December. The report tracks changes in the price of homes and is expected to slow down to 0.6% from 1.0% the month before.
While there are no important releases coming from Norway today, higher oil prices could support the currency during the week. At the time of writing, Brent crude was up 1.05% for the day.
From a technical standpoint, the GBP/NOK pair reached near an important resistance level at 11.65 which had been already tested on December 31.
A break above the 11.65 level could see further strength in the pair, while the January 3 low of 11.51 acts as a mid-term support level. As of 7:10 a.m. London time, the GBP/NOK pair traded at 11.6260.