Polish currency sentiment turns bullish

Kamil Oziemczuk

Relationship Manager, Saxo Bank

This week has seen the the Polish zloty strengthen slightly against the euro, rising from 4.28 to the 4.2650-4.2750 area. USDPLN, meanwhile, closed Monday's session at 3.6548; this has changed the market trend (on a daily Ichimoku chart basis) to a downtrend and given the signal to sell. 

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). 
Enlarge
USDPLN (source: Saxo Bank)
On the other hand, EURPLN has been in a downward movement on the daily Ichimoku chart since August 16. Yesterday, the tenkan sen line (red line) crossed below the kinjun sen line (blue line) on the daily chart. This shows positive sentiment for the Polish zloty that should bring the currency pair closer to the nearest support level at 4.2450 (blue line). It is worth noting that just below the support level we have a neckline (purple line) of a massive head-and-shoulders pattern. In case of a breakout below the neckline (located at around 4.24), we would have a signal to sell with a minimum target of 4.08.
Enlarge
EURPLN (source: Saxo Bank)

You can access both of our platforms from a single Saxo account.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.