Zloty Edges Higher Refreshing Cyclical Highs

EUR/PLN changes hands -67 pips at 4.2551 after sliding to new YtD lows on Monday, with the pair showing close inverse correlation with EUR/USD. In the grand scheme of things, the zloty continues to draw support from strong domestic fundamentals, including the NBP's continued pushback against the prospect of rate cuts anytime soon. POLGB yields are broadly lower as we type, while the WIG20 Index adds 0.7% to print new cyclical highs.

• The round figure of 4.25 provides the next psychological support for EUR/PLN, with Feb 14/5 lows coming up next at 4.2371/62. On the topside, the focus falls on the 50-EMA (4.3117) which limited price action in the second half of March.
• Local headline flow continues to centre around last weekend's local and regional elections, with opinion polls (including exit polls) failing to accurately predict the results in multiple cases, including in the second and third largest city. A poor showing from the Left has inspired an apparent tug-of-war within the ruling coalition, with the centre-right Third Way signalling its ambitions to play a more prominent role.