PLN: EUR/PLN Ticks Away From 4.20 Amid Global Tariff Scare
Global trade tensions have resulted in a rebound in EUR/PLN as 4.20 has remained the line in the sand for the pair. The rate last deals +155 pips at 4.2276 and bulls look for a clearance of the 50-EMA (4.2580). It has now unwound oversold conditions, returning above the lower Bollinger band, while the RSI has returned above 30. Bears look for a resumption of losses and a sustained move through the 4.20 figure.
- S&P Global Manufacturing PMI improved to 48.8 in January from 48.2, exceeding the consensus forecast of 48.5. Accompanying commentary noted that "looking beyond the headline figure there is more cause for optimism, as the 12-month outlook for production rose sharply again". Furthermore, "the strength of the zloty against the euro may hinder Polish firms' efforts to boost exports to the bloc, but it has helped to keep imports cheaper, with average input prices falling for the fourth month running in January and at a solid rate."
- POLGB curve has bear steepened, yields last sit 1.0-4.4bp higher. The Finance Ministry will sell up to PLN3bn of T-bills later today. Deputy Finance Minister Jurand Drop said last week that T-bill sales will now be held every month amid requests from market participants, with auction sizes adjusted according to the needs.
- The NBP will almost certainly stand pat on rates later this week, with Thursday's presser with Governor Adam Glapinski on the radar. The Governor doubled down on his hawkish rhetoric last month, even as most MPC members have refused to rule out easing in 2H25.
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JGB TECHS: (H5) Returns Lower
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.12 @ 15:01 GMT Jan 03
- SUP 1: 141.65 - Low Dec 30
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed and are yet to fully recover, touching 141.65 on the way lower. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.56, a Fibonacci projection point on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
USDCAD TECHS: Bull Flag Highlights A Clear Uptrend
- RES 4: 1.4669 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4392 @ 15:50 GMT Jan 3
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4307/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD is unchanged and bulls remain in the driver’s seat. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4307, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Southbound
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6408 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6247/6282 High Dec 30 / 20-day EMA
- PRICE: 0.6204 @ 15:21 GMT Jan 3
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A bearish trend condition in AUDUSD remains intact and the pair continues to trade closer to latest lows. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6282, the 20-day EMA.
