USD/PLN Price Analysis: Bulls take a breather, still the pair flashes overbought conditions
|- USD/PLN declined by more than 0.70% towards the 4.3000 level.
- Polish government showed concerns about the zloty weakness and added that it should be considered.
- The USD is holding its foot after inflation figures from August.
The USD/PLN declined towards the 4.3000 level, as Polish policymakers have pointed out that they will consider the zloty weakness in the next monetary policy decisions.
Pawel Borys, a senior aide to Prime Minister Morawiecki, was the one who expressed concerns about the weakening of the currency beyond what he considered below the "optimal" as the USD/PLN rose by more than 4% in the last week, driven by the unexpected decision by the Polish central bank to cut rates by 75 basis points. It is worth noting that the Polish central bank governor, Adam Glapinski, justified the rate cuts due to local inflation moderating. Still, markets considered the move political with elections around the corner, which drove investors to dump the Zloty as the Narodowy Bank Polski's (NBP) credibility took a big hit.
On the US side, the Greenback is holding its foot after the US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose to 3.7% YoY, higher than the 3.2% in July and beating the expected 3.6%. Conversely, the Core measure eased to 4.3% YoY, matching expectations. As a reaction, the USD is holding its foot as, according to the CME FedWatch tool, market participants still foresee nearly 40% of the odds of a 25 basis point hike by the Fed in 2023.
USD/PLN Levels to watch
On the technical front, the USD/PLN indicates an overbought sentiment. This implies the potential for a short-term technical recovery, with a possible increase in downward movements. The Relative Strength Index (RSI) is seen above the 70 threshold, while the Moving Average Convergence (MACD) presents neutral green bars. Furthermore, the pair is above the 20,100,200-day Simple Moving Average (SMAs), indicating that the bulls are in command of the broader picture.
Support levels: 4.2400 (200-day SMA), 4.1810 (20-day SMA), 4.1700.
Resistance levels: 4.3200, 4.3500, 4.3800.
USD/PLN Daily Chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.