CZKPLN Risk Reward Skewed To Downside, But Uncertainty Remains Major Risk For PLN

• CZKPLN has been consolidating lower in recent days after testing a local high at 0.1917 last week.
• We previously mentioned that the risk-reward on the CZKPLN is skewed to the downside in the medium term amid slowly growing MP divergence between CNB and NBP .
• The MT chart shows that momentum still looks bullish on the pair, after CZKPLN rejected its 200DMA several time in the beginning of the month.
• However, investors will carefully watch the 0.1850 – 0.1855 support zone; a break below that level would indicate the start of a 'bearish' retracement and would open the door for a move down to 0.1827 (38.2% Fibo of the 0.1634 – 0.1947 range).
• Resistance to watch on the topside stands at 0.19, followed by 0.1918.
• Geopolitical uncertainty remains the major risk of PLN though, as we have seen that Poland and Hungary have been particularly more sensitive to the Russia/Ukraine developments.

Source: Bloomberg