Weekly Gain In EUR/PLN Almost Evaporates Amid Zloty Sales

EUR/PLN rally has been capped at PLN4.5424, as the rate staged another foray above its 20-EMA (PLN4.5374). The absence of domestic catalysts points to a corrective nature of today's move, albeit some participants may have taken note of comments from NBP Governor Glapinski & Prime Minister Morawiecki, both of whom flagged hopes for rate cuts by the year-end (nothing new versus their previous comments). The pair last deals at PLN4.5283, up 266 pips on the session, with bulls looking to take out the 20-EMA and attack May 18 high of PLN4.5547.

• Looking at other crosses, USD/PLN briefly showed above its 50-DMA as it printed new one-month highs. The pair appears to be forming a base, albeit it is too early to tell if the ongoing recovery from May 10 cyclical low (PLN4.1052) will prove sustainable. A close above the 50-DMA would bode well for the bullish case.
• Recent price action of PLN/CZK suggests that the recent rally is losing steam, with the pair staging two unsuccessful attacks at the CZK5.29 area. It last changes hands at CZK5.2206, down 212 pips on the session, and a close below May 19 low of CZK5.2071 would mark the completion of a mini double-top pattern, opening up scope for a deeper sell-off.