Polish Zloty (EUR/PLN) – 4.15 is the crucial support
We have to remember though, that the closer towards the year-end, the more the local currency can appreciate (funds closing positions, central banks making their last moves...). The upcoming week we are not expecting any important macro data from the local economy so the PLN will be dependent upon global sentiment.
As we see on the daily chart, the EUR/PLN started the week close to the 4.18 area but quickly it run south through the 4.17 support level. The Zloty kept appreciating till reaching 4.1482, its lowest level since July of this year. The market bounced as it reached 61.8% retracement level of the long upward move that began in May of this year. What is next? If the 4.15 support is broken, 4.12 will be the next target. On the other hand, the stochastic oscillator is showing the market is oversold and that we should expect a rebound. In this case, 4.17 is the resistance level the EUR/PLN could be testing next week.
Pic.1 EUR/PLN D1 source: xStation
Hungarian Forint (EUR/HUF) – Without significant fundamental news
The direction of the EUR/HUF will be determined by the international trading sentiment. We expect a weakening of the Forint, which could start with breaking the downward trendline on the daily chart at 307.20. After 306.6 level.
Pic.2 EUR/HUF H4 source: Metatrader
Romanian Lei (EUR/RON) – Return of the Leu to the sliding trend
Assessing the currency at the end of this week shows that the episode of strength may have been temporary. As the market settles after the election and looks at the economy, some may shiver at the thought of disembarking from the IMF program. The government estimated deficit for 2015 is far above the 0.9% that the IMF wants, and to cover the spread between the two very unpopular measures would have to be taken. Otherwise, macro data has not been all that bad, with a pickup in IT services contributing to GDP growth and a rise in residential buildings. The natural trend of the market is likely to provide satisfaction to the National Bank’s view that Leu should slowly slide. The gradual resetting of trading ranges could bring us closer to 4.43 - 4.45 next week.From a technical perspective, we are in a rising sentiment halo, pushing higher towards 4.4450. Stronger resistance is at 4.4525 and we may be getting nearer to the moment of truth. The bullish momentum may gain speed in the weeks ahead. In the meantime, any correction should encounter support at 4.4200. The trendline catches up at 4.4120 in the next few sessions.
Pic.3 EUR/RON D1 source: xStation
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