CZK: Continued Gains For CE3 Pair Bring 5.50 Mark Into View

PLN/CZK has retraced more than 76.4% (Fibo level) of its Aug 7 - Sep 20 downswing and last deals +207 pips at 5.4335. The rate operates near its best levels since mid-August but the RSI is flirting with overbought territory. Further gains could result in a test of key resistance from Aug 7 high/round figure of 5.4925/5.5000. Conversely, bears look for a dip towards 5.2288, which limited losses on Sep 20.

• The release of weaker-than-expected Czechia's inflation data yesterday inspired market participants to add dovish CNB bets, applying pressure to the koruna. The Czech central bank's monetary policy meeting on November 2 will be live, with inflowing communications likely to clarify if there has been any shift in the Board's cautious approach.
• The zloty has been garnering strength, being the second-best performer in EMEA FX space, despite elevated uncertainty around parliamentary elections due this Sunday. Note that head of the election commission said that the official results may only be available on Tuesday, while there is a risk that exit polls may fail to provide a clear indication of who will form the next government.