Will USD/PLN hold zł3.9119 support amid selling exhaustion signals?

Traders Union
All News
Currency
US Dollar vs Polish Zloty slides 0.49%

Highlights

Poland's October flash CPI slowed to 3.5% year-on-year and declined 0.3% month-on-month, indicating easing inflation pressure.
The lower inflation reading has reduced immediate pressure on the National Bank of Poland to tighten monetary policy.
USD/PLN trades below key short- and medium-term moving averages, with a projected range of zł3.9119 to zł3.9513 over the next 2 to 3 sessions.

Muted rate hike risk as softer CPI shifts market sentiment

Poland's October flash Consumer Price Index (CPI) slowed to 3.5% year-on-year from 4.1% in September, while prices fell 0.3% on a month-on-month basis, data showed. This softer inflation reading has lessened the urgency for immediate monetary policy tightening by the National Bank of Poland, according to FXStreet. Market participants are weighing these data as a signal of reduced rate hike risk, shaping sentiment around the US Dollar vs Polish Zloty.

Seller dominance persists as buyers eye oversold exhaustion

USD/PLN is currently situated below its MA-20 at zł3.9478 and MA-50 at zł3.9382, while remaining above the MA-200 at zł3.7343. Immediate resistance is defined by the Ichimoku Kijun at zł3.9463, and near-term support is found around zł3.9119. On momentum, MACD continues to indicate a strong buy and ADX maintains a buy tone, both highlighting underlying trend potential. However, RSI stands at 47.83 and signals a sell bias, with Stoch RSI and CCI in oversold territory, suggesting near-term selling exhaustion. Bull/Bear Power confirms seller dominance in intraday action, while the Awesome Oscillator remains neutral.

Directional bias mild as volatility hinge defines outlook

Over the next two to three sessions, USD/PLN is expected to trade within a range of zł3.9119 to zł3.9513. There is a 43% probability of an upward move versus a 57% chance of further decline, with sideways trading as the baseline scenario. Upside breakouts above immediate resistance could accelerate gains, while a break below support would likely prompt additional downside, setting the volatility band relative to current levels.

Anton Kharitonov, expert at Traders Union, highlights that softer Polish inflation data has dampened the case for rate hikes, keeping downside pressure on USD/PLN in the near term. He observes that technicals confirm seller dominance intraday, with momentum still uncertain while key averages offer mixed guidance. Kharitonov remains cautious and suggests waiting for clearer confirmation before taking directional exposure. "As long as USD/PLN is capped below immediate resistance and inflation risk is subdued, my outlook stays defensive."

Earlier, analysts noted that bullish momentum in USD/PLN remained dominant, though overbought signals posed a risk to the uptrend. The current backdrop of moderating inflation and signals of near-term selling exhaustion add a new dimension, making the zł3.9119 support level crucial for traders to monitor as shifting monetary policy expectations influence the pair's trajectory.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.