EUR/PLN: Break higher towards 4.504 – Rabobank

Poland is an economy that relies both on the external and domestic demand. Analysts at Rabobank forecast the EUR/PLN pair heading to the next major resistance.

Key quotes

“An interest rate cut is inevitable, but the effectiveness of the monetary policy will be relatively low given that the policy rate is already at the record low of 1.50%.”

“In the coming days, the government will reportedly reveal an ‘economic bazooka’ to support companies, protect the labour market and stimulate the economy.”

“Foreign investors do not have a strong incentive to sell EUR/PLN around 4.40 in current unfavourable global environment. We anticipate a break higher in the coming weeks towards the next important resistance area of 4.504.54.” 

“It is crucial to emphasise that the risk is firmly skewed towards much sharp squeeze towards 5.00, but such a move may unfold in several stages.”