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Late Equity Roundup: Mildly Lower on Week


Remains Above The 50-Day EMA

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  • CZKJPY has been retracing higher in the past few days after finding a local low at 5.29 on Friday.
  • Support for the CZK has been strong in the past two months as CNB has reviewed its terminal rate to the upside to continue its combat against inflation.
  • Following Governor Rusnok and other policymakers' comments, it is likely that the CNB will hike its policy rate up to 5% in H1 2022 (3.75% current).
  • On the other hand, the BoJ remains very accommodative and has been ruling out policy tightening in its latest meetings.
  • Therefore, support for CZKJPY could continue in the short to medium term as traders keep chasing the interest rates differential.
  • ST resistance to watch stands at 5.4073, which was the high reached last week.
  • A break above that level would open the door for a move up to 5.4550, which was the high reached in early February 2018 when liquidity reached its peak in the EM market (pre Covid).

Source: Bloomberg/MNI

MNI London Bureau | +44 203-865-3850 |
MNI London Bureau | +44 203-865-3850 |

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