EUR/PLN jumps above 4.5700 after NBP unexpected rate cut

The Polish zloty depreciates to the 4.5700 region.
The NBP reduced the policy rate by 75 bps to 6.00%.

Pablo Piovano FXStreet

EUR/PLN rose to levels last seen in early May around the 4.5700 zone in response to the unexpected interest rate cut by the National Bank of Poland (NBP).

EUR/PLN now targets the 200-day SMA around 4.5900

EUR/PLN rapidly added to the weekly move higher after the NBP caught everybody off guard and reduced its policy rate by 75 bps to 6.00% at its monetary policy meeting on Wednesday.

The sudden move by the Polish central bank was the first rate cut since it raised rates to 6.75% (from 6.50%) exactly a year ago.

The NBP's decision to trim rates comes in a context of declining inflation, albeit still elevated by domestic standards. Furthermore, tracked by the CPI, consumer prices rose at an annualized 10.1% in August, retreating for the seventh month in a row after hitting highs past 18% in February.

EUR/PLN levels to consider

So far, spot is up 1.63% at 4.5671 and a breakout of 4.5900 (200-day SMA) would open the door to 4.6158 (monthly high May 1) and then 4.7233 (monthly high March 20). On the other hand, the next support emerges at 4.4545 (55-day SMA) seconded by 4.3985 (2023 low July 31) and finally 4.3753 (monthly low August 18 2020).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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