Weak But Upside Potential

Following the Czech koruna's strong appreciation at the end of 2006, the currency has weakened noticeably since the beginning of the year, falling by 2.4%. From a technical perspective, the currency's break of a two-year trend line on January 23 was a major bearish signal, which set up further depreciation over the ensuing weeks. At the end of February, the koruna approached key support at around CZK28.50/EUR but bounced back in the wake of jitters over the carry trade. Now at CZK28.14/EUR, the currency would have to break through key resistance at around CZK27.70/EUR in order to maintain an upside

To read the full article, please choose one of the following options: