Central Bank Shocks, Zloty Drops: Navigating EURPLN's Steep Ascent
07 September 2023
The EURPLN, while perhaps an exotic trading pair for some, recently witnessed dramatic moves that caught the attention of traders globally. The Central Bank of Poland's surprising monetary decision is at the epicenter of this pronounced shift.
Yesterday, against the backdrop of an inflating economy running at four times the target rate, the Central Bank of Poland took a step that confounded many – they slashed interest rates by a substantial 75 basis points. This shift from 6.75% to 6% wasn't a minor tweak. It was a monumental move, especially considering Poland's present inflation rate sits at a staggering 10%, vastly overshooting the bank's target of 2.5%.
It's no wonder then that the market responded with swift decisiveness. The Polish Zloty took a hit, depreciating in value almost immediately. On the EURPLN chart, the immediate aftermath was evident. The currency pair shattered the 4.48 resistance level, represented with a green line, soaring higher to touch the 4.58 mark.
The upward momentum seems far from over. Technical indicators suggest that the currency pair's next goal is the black downtrend line, followed closely by the blue downtrend line. Given the current market dynamics and the Central Bank's unexpected move, reaching these targets in the coming weeks appears more likely than not.