/CZK: Pair Breaches Support From 50-DMA After CNB MonPol Decision

PLN/CZK sold off after yesterday's hawkish hold from the Czech National Bank, breaching its 50-DMA, which limited losses on Mar 23. The pair continued to lose altitude this morning, printing a new three-week low at CZK5.0120, before it reversed initial losses. The 50-DMA has capped the pair's rebound, with PLN/CZK last seen +33 pips at CZK5.0288.

• Technically, bears look for continued sales past Mar 6 low of CZK4.9678, which would expose a cluster of intraday lows (including an all-time trough) concentrated around the CZK4.95 mark. On the flip side, a return above the 50-DMA (CZK5.0318) would prompt bulls to target Mar 15 cyclical high of CZK5.1319.
• Relative interest-rate dynamics will continue to grab attention after the CNB used its most recent monetary policy meeting to demonstrate resolve in fighting inflation, even if it requires keeping monetary conditions tighter for longer.
• Meanwhile, communications from the NBP majority camp pointed to a lower threshold for starting rate cuts, with Governor Glapinski stressing the socioeconomic costs of monetary tightening even as he refuses to formally end the rate-hike cycle.