May 20, 2022 08:27 GMT
- USDPLN has been retracing lower this week, breaking below the 4.40 support; next level to watch on the downside stands at 4.3340 (50DMA). On the topside, ST resistance to watch stands at 4.4450.
- The ‘positive’ momentum on PLN has led to a slight rebound in Polish equities in the past week, with WIG20 index consolidating towards the 1,800 level after finding a local low at 1,652.30 last week.
- The chart shows that the Polish equities have historically strong co-moved with the USDPLN exchange rate; periods of PLN strength have been associated with equity strength (and vice versa) in the past cycle.
- However, the lack of visibility and convictions in markets (particularly in Europe) could challenge risky assets in the near term, with market uncertainty maintaining implied vol elevated in the coming weeks.