Zloty On Back Foot Ahead Of NBP Rate Decision

EUR/PLN refreshed its cyclical lows yesterday but rejected support from a short-term bear channel floor at PLN4.4697 and corrected the move. The rate last changes hands +119 pips at PLN4.4873, with the zloty showing some weakness ahead of the local central bank's rate decision. POLGBs extend their recent gains, with benchmark 10-year yield consolidating below the 6% mark.

• From a technical point of view, bulls need a break above Jun 1/May 18 highs of PLN4.5480/4.5547 before setting their sights on the 50-EMA, which intersects at PLN4.5690. On the flip side, a dip through the channel floor at PLN4.4690 would allow bears to target Jun 7, 2021 low of PLN4.4360.
• The NBP rate decision is a key domestic risk event this week. The statement will be published at some point later today, but it is Governor Adam Glapinski's press conference that is usually more instructive. The official is scheduled to speak tomorrow at 14:00BST/15:00CEST in Warsaw. For the record, the MPC is universally expected to keep interest rates unchanged, but their official communications may shed some light on the likely timing of the first rate cut.
• Note that the NBP's meeting and press conference have been brought forward by one day due to a public holiday on Thursday.