What would happen if some of the main beneficiaries of the ECB policy were countries in Eastern Europe? This idea is not so far-fetched if we consider that banks and companies could use the cash to invest in European Union countries, but not in the Monetary Union, with labour costs and lower taxes. If we look at the changes, one of those who has had one of the most significant movement from the technical point of view since last Thursday is EURPLN. The top graph shows on the top EURPLN on reverse scale, where we can see that a head and shoulder figure has already been formalized and it seems to nominate the Zloty to a strength scenario in the medium term. But EURPLN also has the advantage that it tends to anticipate the movement of the stock market in Eastern Europe (the lower graph is in fact the MSCI Eastern Europe). If the next sessions will confirm the bullish view for the Polish currency, a regional overweight on Eastern Europe could be a good asset allocation idea.
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