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CZK Remains ‘Strong’ Despite Risk Off Environment

CZECHIA
  • While the surge in risk off sentiment has been weighing on CEE currencies (HUF, PLN), CZK has remained ‘strong’ with EURCZK still trading within its tight range between 24.67 and 24.77.
  • The pair tested its ST resistance at 24.8030, which corresponds to the 61.8% FIbo retracement of the 24.09 – 25.95 range.
  • A break above that level would open the door for a move up to 24.8850 (200DMA).
  • This morning, economic data to watch will be international reserves (10am CET)
  • As a reminder, Czech Republic is one of the EM with the highest level of international reserves (as a percentage of GDP), currently standing at nearly 70% (vs. 20%-40% range for other EM countries).

Source: Bloomberg

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