Polish currency sentiment turns bullish
Relationship Manager, Saxo Bank
The risk-off tone linked to the Turkish lira and its contagion into other emerging market currencies at the beginning of August weakened the zloty by 2.3% and 5.2% versus the euro and the US dollar respectively. The PLN and the Warsaw Stock Exchange are usually quite fragile to EM developments.
From a technical analysis standpoint, the Turkish lira has been stabilising after a period of high volatility for the past week and this improved the mood on the Polish zloty. This week, the lira again started a renewed fall against the dollar, but the zloty is surprisingly proving very stable this far.
After a sell signal and trend change at the close of Monday’s session, USDPLN has been consolidating. Prices are below the Ichimoku cloud, meaning that the instrument is in a downtrend. The next support areas are located at 3.64 and then 3.5950. The nearest resistance levels are at 3.6757-3.6882 (span B line).
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