Euro to Polish Złoty outlook: Downside risk grows as selling momentum persists

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Euro vs Polish Złoty drops 0.71% today

Highlights

Commerzbank warns that political conflict involving the Constitutional Tribunal is increasing perceived political risk in Poland.
The euro advanced against the złoty with market participants focusing on Poland's political tensions and fiscal outlook.
EUR/PLN trades under short- and medium-term moving averages with strong bearish momentum and is projected to fluctuate between zł4.3627 and zł4.4065 over the next 2 to 3 days.

Political and fiscal uncertainty drive risk premium in EUR/PLN

Commerzbank has warned that ongoing political conflict involving the Constitutional Tribunal in Poland is increasing perceived political risk and raising volatility for the Polish złoty, according to FXStreet. Following these developments, the euro advanced against the złoty amid market concerns over political tensions and Poland's fiscal outlook, as reported by FXStreet and Bank. As political and fiscal risks remain elevated, recent trading reflects heightened caution around the Euro vs Polish Złoty pair.

Short-term bearish momentum persists as support levels are tested

On the technical front, EUR/PLN trades below the MA-20 and MA-50 on the hourly chart, indicating downward pressure in both the short and medium term. The pair remains above the MA-200, while the Ichimoku Kijun is positioned at zł4.4024 and acts as immediate resistance. Momentum indicators, including MACD and ADX, are in sell territory, and the RSI, Stochastic RSI, and CCI have all entered their respective oversold zones, highlighting selling exhaustion. Bull/Bear Power remains negative, confirming seller dominance, and the Awesome Oscillator aligns with this broader intraday bearish momentum.

Consolidation likely amid downside risk and volatility expansion

Over the next two to three trading days, EUR/PLN is expected to fluctuate within a volatility band between zł4.3627 and zł4.4065. The probability of a move higher is very low, while there remains a high likelihood of further downside. The base case sees the pair consolidating within this corridor, but a break above immediate resistance could shift momentum upward. Conversely, a sustained move below support would likely accelerate the downtrend.

Anton Kharitonov, expert at Traders Union, sees a fragile outlook for EUR/PLN as the pair remains weighed down by political and fiscal uncertainty in Poland. Technical signals confirm ongoing bearish momentum, with sellers in control and oversold indicators pointing to temporary selling exhaustion. He believes short-term downside risk is elevated unless immediate resistance is reclaimed. "With political risk high and technicals still weak, I see no compelling reason to expect a rebound in EUR/PLN at this stage."

Earlier, analysts noted that EUR/PLN maintained persistent bullish momentum, supported by strong technical indicators. However, the latest market action highlights a shift to intraday bearish pressure and elevated political risk, making the zł4.3627 support level a critical area to monitor for potential downside acceleration.

Source of Data: EUR 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.