Yesterday we had suggested the Slovak
koruna would experience range-bound
trading. It didn’t occur though. Contrary,
the currency made a bold higher, firming
from the 37.37 to 37.19 EUR/SKK. Mainly
London banks were active on the market.
When the 37.30 resistance was broken,
we saw stop-losses coming into play,
causing currency’s move to its 5-month
high.
Today, the economic calendar is
empty and the koruna will mainly follow
the region. But as we have seen
yesterday, the unit was resistant against
the uncertainty in the region and was able
to firm. We are of the opinion that recent
SKK strengthening has been too fast,
which means EURSKK is likely to stabilise
in the near term. At these low levels, the
interest to sell EURSKK should dry up
somewhat, unless London banks decide to
test the 37.10 support.
(CSOB - Investment research)