- As expected, the Polish MPC has left interest rates unchanged.
- The message coming from the MPC is increasingly hawkish.
- Polish zloty is back on the path of strengthening against the US dollar and Euro, creating trading opportunities.
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Polish central bank chief Adam Glapinski surprised markets yesterday by suggesting potential interest rate hikes, defying the global trend of rate cuts. This hawkish stance is boosting the Polish zloty (PLN) against major currencies and creating trading opportunities for forex traders.
While the recent Polish Monetary Policy Council meeting kept rates unchanged, Glapinski's comments hinted at a potential shift towards tighter monetary policy in the future. This change could come as early as 2026, driven by concerns about inflation rising due to the government's plan to remove price controls on energy.
The prospect of higher interest rates is positive news for Polish banks, as it would increase their net interest income. Additionally, the zloty is benefiting from this unexpected hawkishness and is currently headed back towards key support levels against both the Euro (EUR) and the US Dollar (USD).
So, let's take a look at two low-risk, high-reward trading opportunities that could spring in USD/PLN and EUR/PLN.
1. USD/PLN Nears Key Support - Potential Bounce in the Offing
The USD/PLN pair has continued its downward trend this week, strengthening below the psychological barrier of PLN 4 per dollar. The primary target for sellers remains the key support area of 3.92-3.90, tested several times in recent months.
This level remains a strong support area and could potentially lead to a bounce in the pair. Overcoming this level will require a significant macroeconomic impulse, such as US economic data that could prompt the Federal Reserve to start cutting interest rates, thereby weakening the US dollar.
2. EUR/PLN's Potential Rebound Based on ABCD Pattern
The EUR/PLN currency pair is poised for a new downward impulse, driven by recent declines that align with the ABCD pattern's development, nearing a strong support area. 
The EUR/PLN currency pair is currently experiencing a downward trend, suggesting the start of a new supply impulse. This decline is part of the ABCD pattern, which is approaching a significant support zone. The target level for this trend is between 4.25 and 4.24, a clear demand zone similar to USD/PLN.
Given the increasingly hawkish stance of the NBP and a periodically weaker euro, a continuation of the decline seems likely. However, any potential breakout will be challenging, presenting an opportunity to attempt a local rebound.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.