Bearish Trend Intact In EUR/PLN Weekly Chart, Fiscal Matters Eyed Amid Coming Elex Marathon

Despite its intraday gains today, EUR/PLN is on track to finish the week on the back foot, extending a well-defined downtrend, which has steepened over the past few months. Looking at a weekly chart, this recent sell-off allowed the pair to pierce the 50% retracement of its 2015 - 2022 rally, turning bearish focus to PLN4.3625, the 61.8% retracement of that move. These Fibo levels supported price action in 2022 and 2020 respectively. Bulls should take note of the RSI's move into oversold territory and will look for signs of a stronger correction.

• As a reminder, all of Poland's major political parties are holding campaign events and rallies tomorrow, which local media dubbed "Super Saturday" (reference to US Super Tuesdays). From a market perspective, the focus will be on any fresh fiscal pledges and the implications of fiscal loosening around election time for NBP rate path. General election strategies of major contenders will also be scrutinised. According to a DGP report from yesterday, opposition parties are unlikely to finalise their non-aggression pact for the upper house election (which uses single-seat constituencies) until July.
• While parliamentary elections are most consequential under Poland's political system, the election marathon will continue in the months following this autumn's poll, raising the risk of further fiscal expansion further down the line. Looking beyond the end of this year, Poland will hold local elections in spring 2024, European election in June 2024 and a presidential election in summer 2025.