The Polish zloty has found some support, but EUR\/PLN has continued to grind higher after pushing through the July and August highs at 4.34. The move has taken the pair towards 4.40\u20134.41, described as the upper edge of a multi-month ascending channel and a near-term resistance area; 4.34 is framed as key support, with a break below it seen as opening the way to a deeper pullback. If the cross clears 4.40\u20134.41, the next levels flagged are 4.45 and then 4.48.<\/p>\n\n
The National Bank of Poland is expected to keep its policy rate unchanged at 3.75% at today\u2019s meeting, after inflation rose above the top of its tolerance band, set at 4%, in September. Attention then turns to Governor Glapi\u0144ski\u2019s comments tomorrow, with the communication expected to focus on inflation risks and to condition markets for a possible rate increase in November, when updated staff forecasts are due. Even with a more hawkish tone, EUR\/PLN is still projected to hold above 4.35 given geopolitical and external risks.<\/p>\n\n
We are closely watching the National Bank of Poland’s decision today, where we expect interest rates to hold at 3.75% despite September inflation creeping past the 4% threshold. This rate pause, combined with anticipation of a hawkish tone from the central bank’s governor tomorrow, prepares the ground for a potential rate hike in November. Derivative traders should prepare for heightened volatility in Polish Zloty (PLN) pairs as the market prices in these hawkish expectations.<\/p>\n\n
We see EUR\/PLN testing critical resistance near the 4.40 to 4.41 level, which represents the upper boundary of a multi-month ascending channel. If the pair breaks above this ceiling, it opens the door for a stronger upward trend targeting 4.45 and eventually 4.48 in the coming weeks. For those trading options or futures, breakout strategies above 4.41 could offer compelling risk-to-reward setups.<\/p>\n\n
On the downside, the previous August peak of 4.34 remains a pivotal support level that we believe will prevent any deep pullbacks for now. Only a sustained move below this 4.34 floor would signal a shift back to a stronger zloty and negate the current bullish setup for EUR\/PLN. Traders should consider placing stop-loss orders just below this level to protect capital against unexpected hawkish surprises.<\/p>\n\n
Geopolitical tensions in Eastern Europe and broader global market uncertainties continue to keep the zloty under pressure, making a drop below 4.35 unlikely in the near term. Historically, during periods of heightened regional risk, emerging market currencies like the zloty have depreciated by an average of 3% to 5% against the euro within short windows, reinforcing our cautious outlook. We recommend using volatility-based strategies, such as straddle options or wide-margin limit orders, to navigate the expected fluctuations over the next fortnight.<\/p>\n\n\n\n