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Zloty Sell-Off Continues, PLN/CZK Tests Key Support

PLN

EUR/PLN has extended gains but the rally paused just ahead of the 4.50 figure for now. The rate last sits +430 pips at 4.4925, with gains facilitated by thin liquidity, as Polish markets are shut for a public holiday. Wider market sentiment remains in the driving seat, but the zloty has now landed at the bottom of the EMEA pile. From a technical perspective, bulls look for a move towards Jul 6 high of 4.5040, located just above the 23.6% retracement of the Feb 14 - Jul 31 sell-off at 4.4930.

  • PLN/CZK has been under pressure, shedding 394 pips so far to last sit at 5.3683. The rate is testing support from the 50-DMA/23.6% retracement of the Feb 15 - Aug 7 move at 5.3703/5.3644. A clean breach of these levels would highlight potential for a deeper correction. Hawkish CNB minutes released last Friday have applied pressure to the pair, especially when contrasted with dovish NBP expectations.

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