EURPLN Pierces Below Post-NFP Lows

EURPLN has pierced below Friday’s lows around the 4.34 region in recent trade. The zloty is outperforming the Hungarian forint, both of which are lagging the Czech koruna. A slightly firmer single currency and lower US yields are potentially providing a tailwind to the euro-proxies, though local catalysts today have been limited.
PLNHUF continues to trade below the 50-DMA at 87.17 having closed below that average for the first time since October last week, while PLNCZK has traded on either side of 5.65 today.

• From a technical perspective, the downtrend in EURPLN remains intact with the recent recovery considered corrective. The cross traded to a fresh trend low on Dec 13, confirming a resumption of the downtrend. This signals scope for an extension towards 4.2870, the Mar 4 2020 low. Clearance of this level would open 4.2650, the Feb 19 2020 low.
• Market participants will be looking ahead to the NBP rate decision on Wednesday. Sell-side analysts are unanimous in their call for another on-hold decision following despite inflation falling more than forecast in December. Our full preview of the decision can be found here.