EUROCZK whats goin on at home? Euro testing testing structure, and breakout of the downward short term trend line. Seem like a good opportunity to buy pullback. Stop loss bellow the recent swing low.
Dan
EURCZK trade ideas
EUR/CZK 1H Chart: Begins expected surgeThe previous review of the EUR/CZK currency pair was concentrating on the fact that the pair was about to break the upper trend line of a junior descending pattern. It occurred on August 1 and the rate traded sideways in the aftermath of the breaking.
On Thursday, the currency rate stopped the sideways movements and broke past the SMAs, which kept it lower for the past two trading sessions. Namely, the previously expected surge has begun.
Most likely in the future the rate will form an ascending pattern of the same scale as the just broken channel down pattern.
EUR/CZK 1H Chart: Pair remains squeezed The EUR/CZK exchange rate has been trading in a channel-like formation since early 2018. The upper boundary of this pattern was tested on May 1 when the Euro reversed from the 25.75 mark. The pair’s subsequent movement has been downwards until 25.55 where the pair was located at the time of this analysis.
Technical indicators are generally neutral, thus demonstrating that the current movement sideways which has prevailed during the previous two weeks could still dominate the market for a couple of sessions. Technical signals on the daily time-frame, however, are more bearish, thus suggesting that the rate could eventually resume moving lower down to the senior channel around 25.30. The monthly S1 is likewise located near this area.
In case the dashed trend-line and the weekly R1 circa 25.60 are breached to the upside today, traders might see a surge to the opposite channel boundary and the monthly R1 at 25.75.
EUR/CZK Pair stands at resistanceThe common European currency has recently met with the support of a medium scale ascending pattern against the Czech Krona. This event has resulted in the formation of a junior ascending pattern.
On Monday the currency rate was standing just below the resistance of the pattern. In addition, the resistance was strengthened by the 200-period SMA and the monthly pivot point just below the 25.40 mark.
Due to these levels of significance it is expected that the currency pair will break the resistance or fails at an attempt to surge higher and decline. Either way there should be additional momentum.
EURCZK: Strong downside pressureThe EURCZK is showing very strong downside pressure. A year ago price broke to the downside and it is still falling. On the weekly chart you can see the start of this drop after a long and tight consolidation.
On the daily chart you can see price just came back into the trendline again and it reactied with another sell off.
Clear support and resistance, resprected trendline, strong downside pressure. All reasons to go short on this pair.
"Trade what you see, not what you thing"
EURCZK short from 26.89 Strong move after central bank 27.00 cap removal. Looking to short from 26.89 for 26.20 against 27.30
CZK is closed to price area where CNB started intervation 2013This is interesting how CNB by intervention did job. The price is back but rates was rised today by CNB after long time.
It means CNB gave curency back to market. Is the question if they will keep price 26 or not.
Streaks of signals pop up to short EUR/CZKStreaks of signals pop up to short EUR/CZK – Falling wedge, whipsaws with bearish EMA crossover indicate extreme weakness:
EURCZK spot prices slide in falling wedge formation, as and when the abrupt upswings are observed the bears have been active at 21DMA (on the daily chart).
Very recently, you could very well observe the failure swings occurred exactly at stiff wedge resistance with shooting star formation at 26.2920 levels, consequently, prices slid below DMAs, expect more slumps on bearish DMA crossover.
On this timeframe, every now and then, shooting star candle patterns are occurred to signal weakness.
On a broader perspective, you can easily figure out whipsaws pattern occurred on EMAs ends with shooting star candle to indicate extreme weakness.
In conjunction with this bearish signal, 3-black crows candle pattern has occurred that signals more slumps on the table, bearish EMA crossover substantiate this bearish stance.
Most notably, both leading oscillators (RSI and stochastic) signal intensified bearish momentum by evidencing downward convergence. While both lagging indicators on both timeframes are also substantiating this bearish stance, please be noted that the bearish DMA and EMA crossovers signal the extension of price slumps. MACD, on the other hand, has been indecisive (on 4H chart) and signifies the extension of the bearish trend on monthly terms.
Fundamentally, CNB's latest board minutes, from June, portray an increasingly confident central bank, convinced that all domestic macroeconomic parameters are now consistent with (gradual) normalization of monetary policy.
We envisage only a low probability that the CB will hike its base rate by 0.20bp to 0.25% in early August. And in the case of a rate hike, we would not see CNB continuing its hiking cycle at a regular interval as we, anticipate the subsequent course of inflation around CEE to be soft. Rather, we would see a rate hike as a one-off adjustment of the policy rate away from 'technical zero'. We see EUR-CZK gradually declining further over the coming year.
Hence, contemplating above technical as well as fundamental rationale, we advocate shorts in EURCZK via forward contracts of far month tenors – for southward targets upto 25.77 or below, expiry 27 November 2017. Marked at 2.25%.
