Firm Demand For EUR/PLN Emerges After Dip Below 4.30

EUR/PLN probed the water below 4.30 on Wednesday but then staged a strong rebound. Recent widespread talk of the significance of that level suggests that some participants may have been taking profit in that area. That being said, the upswing was parallelled by similar moves in EUR/CZK and EUR/HUF, even as EUR/CZK retraced the move later on.

• Similar speculation surrounding trading activity can be found in this morning's comments from ING (who note that a clean breach of 4.30 yesterday likely triggered large buying orders, which pushed EUR/PLN back towards 4.32) and Pekao (who flagged strong demand for EUR/PLN around 4.30).
• Millennium Bank interpret yesterday's price action as indicative of continued pressure on the 4.30 figure but they believe that the eventual breach will be gradual rather than resulting from a single rapid move.
• From a technical viewpoint, a sustained move through 4.30 would bring Dec 13 low of 4.2935 into play. On the flip side, a clearance of Feb 7 high of 4.3564 is needed to put a near-term correction on the table. The pair last deals +20 pips at 4.3226.
• Poland's GDP was flat in Q/Q terms in 4Q2023 and grew 1.0% compared to the same time in 2022. Final data was consistent with preliminary readings, throwing no curveballs to market participants.
• The Finance Minister suggested that the government could unveil its plan for VAT on food (one of the key anti-inflation measures) as soon as next week.