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EUR/CZK Stays Near Cyclical Lows, RSI Remains In Oversold Territory

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EUR/CZK trades at 24.723, little changed on the day, with local headline flow containing little in the way of notable catalysts. The pair consolidates its gains from earlier in the week, which were facilitated by a dovish shift in the perceptions of Fed rate outlook. The koruna has been the third-best performer in the EMEA space after the PLN and RUB.

  • The rate has moved through its 50-, 100- and 200-DMAs since mid-April, entering oversold territory. The RSI remains below the 30 threshold, last sitting at 28.4. A corrective recovery, without a breach of the 200-DMA, would open up scope for renewed losses.
  • Note that the koruna fares better than implied by the CNB's Spring Forecast, which assumed that EUR/CZK would average at 25.20 in Q2 after trading at 25.10 in Q1. The koruna's appreciation into the beginning of Q2 may provide a dovish argument for the Bank Board, despite the recent beat in April CPI.
  • A break above the 200-DMA (24.761) would allow bulls to take aim at the 100-DMA (25.096). Conversely, losses past Jan 8 low of 24.458 would reassure bearish traders.
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EUR/CZK trades at 24.723, little changed on the day, with local headline flow containing little in the way of notable catalysts. The pair consolidates its gains from earlier in the week, which were facilitated by a dovish shift in the perceptions of Fed rate outlook. The koruna has been the third-best performer in the EMEA space after the PLN and RUB.

  • The rate has moved through its 50-, 100- and 200-DMAs since mid-April, entering oversold territory. The RSI remains below the 30 threshold, last sitting at 28.4. A corrective recovery, without a breach of the 200-DMA, would open up scope for renewed losses.
  • Note that the koruna fares better than implied by the CNB's Spring Forecast, which assumed that EUR/CZK would average at 25.20 in Q2 after trading at 25.10 in Q1. The koruna's appreciation into the beginning of Q2 may provide a dovish argument for the Bank Board, despite the recent beat in April CPI.
  • A break above the 200-DMA (24.761) would allow bulls to take aim at the 100-DMA (25.096). Conversely, losses past Jan 8 low of 24.458 would reassure bearish traders.