EURCZK Forecast / Forex Technical Analysis

EURCZK Forecast – Stability in Czech Monetary Policy

In today’s comprehensive EURCZK forecast, we will examine the Czech Republic’s current economic conditions and then meticulously examine the EURCZK pair’s technical analysis.

Stability in Monetary Policy

Bloomberg—In November 2023, the Czech National Bank decided to maintain the status quo on its key interest rate, keeping it at 7% for the eleventh time in a row, a move that financial market experts expected. The rates that banks receive for deposits and the rates they charge for loans also stayed unchanged, at 6% and 8%, respectively.

Czech Republic Inflation Trends

Furthermore, the rate at which prices are rising in the Czech Republic is on a downward trajectory. It reached a 6.9% increase in September, a low not seen since the final month of 2021. It’s projected to slowly edge towards the central bank’s ideal rate of 2% in the first six months of 2024. Yet, there’s an anticipation of a slight rise in prices in October, a repercussion of the reduced energy costs introduced in the prior year.

The head of the central bank, Ales Michl, has indicated that any reductions in interest rates will be minimal and carried out over time, especially since the forecast for the core inflation rate in 2024 hovers around 3%. This careful approach reflects a cautious optimism about the country’s economic direction, with a watchful eye on inflation rates as a critical indicator of financial health and stability.

EURCZK Forecast and Technical Analysis

The EURCZK currency pair is currently trading within a robust and bullish channel. The pair is testing the lower line of the channel and the 24.34 support level, known as S1. The RSI indicator shows divergence, often a signal for a trend reversal or an imminent correction. With the pair hovering above the Ichimoku cloud, our EURCZK forecast suggests looking for buying opportunities.

EURCZK Forecast – Stability in Czech Monetary Policy – Daily Chart

To gain a more detailed insight into the EURCZK forecast, we can examine the 4-hour chart. The RSI indicator is oversold, and the EURCZK trading bias is bearish. To go long on the currency pair, the bulls must close above the bearish trend line (marked in red), around 24.5.

If the price closes above this resistance level, our EURCZK forecast suggests a bullish scenario with risk below the recent low and targeting the 24.65 pivot.