Zloty To Re-Engage With Appreciatory Trend In 2010

Having retested major resistance at PLN4.0500/EUR in mid-January (a level which has remained a major obstacle to further appreciation since August 2009), the Polish zloty has since eased back following the sharp sell-off in CEE equity indices in recent days. This in turn has seen the emerging flag pattern tighten, suggesting that a significant break out for the zloty could be on the cards. A decisive move through support at PLN4.1000/EUR would presage further losses towards PLN4.3000/EUR in the short term, while a breach of resistance would likely spur further gains to the stronger end of the current trend channel at PLN3.7500/EUR.

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