A Glimpse on PLN” is series of analysis created in cooperation with BDSwiss broker. You can track all these analysis every week on portal Comparic. The aim is to present current market situation on the currency pairs connected with the PLN.
This week is extremely poor in macroeconomic publications coming from polish economy. Only tomorrow we will know first data that will concern the consumer and business climate, and on Thursday will be published report on the unemployment rate and the minutes of the Monetary Policy Council.
As a result, the current situation on PLN pairs is significantly influenced by “external” publications concerning other economies.
As a result of last week’s declines market yesterday reached a critical support area of 4.2560, which rejection could trigger rebound and re-test of level 4.3500, which now coincides with the 38.2% Fibonacci correction from the entire lasting from 6 December downward movement.
Taking into account the dynamics of the current impulse, it seems increasingly possible to overcome the current support and continue declines.
Looking at weekly chart, we will see that if the bearish scenario is on tact, potential drops could reach even around 4.0150.
Since last week when the market finally rejected resistance at level of 4.10 we observe a pro-decline scenario, which I have already mentioned many times in this cycle of analyses. As a result of yesterday’s dynamic decline, we have beaten 3.98 significant support and an uptrend line. If this trend continues, in near future we would expect to be able to test the 3.7750 level that converges to the levels:
161.8% external measurement of previous downward impulses,
261.8% external measure of the last rising correction.
After lasting from the beginning of March this year consolidation, last week market beat support at the level of 4.0100. Since then, declines have been continuing and we expect to be able to test level around 3.8900 in the nearest future, although it is worth noting that the latest support has not yet been re-tested, and that the market may decide to test this from the bottom as resistance.