EUR/PLN maintains the bullish momentum with the 2009 high at 4.9307 in its sights – Rabobank

After spending a few sessions in a consolidation, EUR/PLN broke higher on Wednesday revisiting the March high at 4.6342. Monthly and daily charts are showgin strong bullish momentum with the pair set to gun towards the 2009 high of 4.9307, Piotr Matys, Senior Emerging Markets FX Strategist at Rabobank, reports. 

Key quotes

“Unless the pace of infections slows down in the coming days, the government may have no choice but to announce another national lockdown. The risk of such a scenario is high as for the first time Poland reported more than 20,000 infections per day today.”

“The next major point of reference for EUR/PLN is the 2009 high at 4.9307. Admittedly, it is quite far and better sellers may step in well before it is reached, but at this stage the bias remains firmly skewed to the upside.”

“It is also worth noting a substantial escalation in domestic tension fuelled by a conflict over abortion rights seems to be a source of concerns for investors. Given that the announcement of much stricter abortion rule coincided with the rapid escalation of infections, it seems perfectly plausible that the conservative Law & Justice party uses this contentious issue to divert attention from the pandemic.”

“A near total ban on abortion will be interpreted by many as yet another step to transform Poland into an ultra-conservative country where the rights of women, gay and transgender people are curtailed. Hostility towards LGBT is well documented in Poland as witnessed most recently a few months ago during very tense and toxic presidential election campaign.”