Zloty Extends Corrective Pullback, Data & NBP Speak Take Focus

EUR/PLN rebounded from its worst levels since March 2020, returning above the 4.35 mark, while USD/PLN moved back above the psychologically significant 4.00 level. The upswings in both pairs allowed them to unwind oversold conditions, with respective RSIs bouncing above the 70 threshold.

• When this is being typed, EUR/PLN trades at 4.3795, 70 pips above neutral levels. A break above the 20-EMA at 4.4203 would bring Oct 25 high of 4.4898 into view. Bears look for a dip towards Mar 12, 2020 low of 4.3237.
• Local macro data and NBP rhetoric continue to amount to a more hawkish picture of the economy. Retail sales beat expectations, which came alongside a stronger-than-expected consumer confidence print and above-forecast real wage growth. NBP's Ireneusz Dabrowski (previously considered as a relatively dovish policymaker) warned that disinflation may be slower with the current wage pressure.
• Prime Minister Morawiecki invited opposition parties to join his "Coalition of Polish Matters" as he is facing the deadline to propose a Cabinet until November 27. His call is expected to fall flat, with pro-EU parties waiting for a green light form their own coalition government, which may happen in early December.
• Political uncertainty around NBP leadership continues, with leading PM candidate Donald Tusk vowing to carefully analyse the option of investigating Governor Glapinski's conduct, which could result in his suspension. President Duda's chief called on Tusk to abandon these plans.