Quotations of the US dollar to the Polish zloty (PLN) once again tested the barrier at level 3.43 this week. As can be seen in the daily chart below, the price went above this area on Tuesday, but recently returned to its range.
This price action may indicate that the breakout was false and the price will still be in the range, the lower limit of which is visible near 3.31.
Confirmation of the validity of the above scenario can be sought on the 4-hour chart, where the formation of the head and shoulders is formed, and additionally we have there a short-term upward trend line running from the low from February this year.
For the time being, the H&S formation has not been confirmed, because the neck line is respected all the time. So it can not be said whether the right arm is already formed. It may also lead to setting of new maximum and the negation of this potential scenario.
If, however, the area forming the neck line and the upward trend line visible in the chart below is broken, the price may go down to support at 3.37. The key area of defense here, however, is located close to 3.31, because in this area there are this year’s lows.