Daily analysis 26.06.2013

, author:

Marcin Lipka

Much better then expected data from the U.S pushed the EUR/USD again under 1.31 mark. EUR/USD comes back around 4.33. The data regarding Polish pension fund should not affect the FX market.

Macro data (CET- Central European Time). Survey is supplied by Bloomberg unless otherwise noted.

  • 14.30 CET: final GDP reading from the U.S (survey +2.4%))

Better-then-expected data stopped EUR/USD correction .

Yesterday the EUR/USD tried to generate a correction after a solid slide from 1.34 level. The rebound, however, was swiftly stopped by much better-then-expected data from the U.S economy. All macro reports on Tuesday were solid. Retail sales jumped 0.7% (survey: 0.0%), home sales increased to 476k (expected 460) and Conference Board index describing consumer confidence soared to 5 year high (strongest reading since February 2008). According to the current market perception solid U.S data should support the dollar (brining the Fed closer to the tapering). In result, the slight rebound on the EUR/USD was quickly leveled off.

The positive eco data was quite neutral for the U.S stock market. In the longer time solid economy is, of course, bullish for stocks, but in the short term the neutral data (even slightly weak) can push the Federal Reserve to keep the QE3 for longer time.

Summarizing the situation on the EUR/USD should favor the bears. We are getting closer to the end of asset purchase and over all aversion to the risk (liquidity issues in China, overall negative sentiment toward EM) are bullish form the dollar. The successful test of 1.30 level seems to be quite possible.

The zloty is again weaker

The Polish currency, despite some rebound on the local bonds, was not able to hold the gains till the end of the day, and we closed the session around 4.33. The main reason of PLN slide came from the EUR/USD. The zloty is much more sensitive to the QE perspective then, for example, Hungarian forint.

Polish retail sales was close to the market consensus. There is no signs that the economy is going to rebound strongly in the 2nd half of the year. It should also not change the MPC perception toward the interest rates. It is still expected that Marek Belka and his colleagues will lower the benchmark by 25 bps in July.

Summarizing the zloty should be fairly stable today. If the EUR/USD stays over 1.30 level the zloty should remain between 4.30-4.35. Published at around 10.00 CET Polish pension plan decision should to initiate any move on the zloty.

Expected levels of PLN according to the EUR/USD rate:

EUR/USD 1.3150-1.3250 1.3250-1.3350 1.3050-1.3150
EUR/PLN 4.3000-4.3400 4.3000-4.3400 4.3000-4.3400
USD/PLN 3.2500-3.2900 3.2200-3.2600 3.2200-3.2600
CHF/PLN 3.5000-3.5400 3.5000-3.5400 3.5000-3.5400

Expected GBP/PLN levels according to the GBP/PLN rate:

GBP/USD 1.5450-1.5550 1.5450-1.5550 1.5350-1.5450
GBP/PLN 5.0700-5.1100 5.0900-5.1300 5.0500-5.0900

Overall technical situation on the analyzed pairs:

EUR/USD remains under pressure but 50 DMA and 200 DMA still support the pair. All polish pairs are still in bullish trends.

Technical analysis EUR/USD: the first target for the EUR/USD is 1.30. The pair is still holding above 50 DMA and 200 DMA, but when that support is broken the slide toward 1.30 should speed up.


Technical analysis EUR/PLN: the situation is still bullish. The target remains 4.40. Only the slide under 4.28 should bring more bears and push the pair toward 4.22.


Technical analysis USD/PLN: the rise over 3.22 was a strong buying signal. The target for USD/PLN is around 3.30. If the PLN weakness continues, then the next target will be around 3.35 and in extension 3.5.


Technical analysis CHF/PLN: we broke 3.50, so the next target is around 3.60. The slide under 4.38 prefers the selling side.


Technical analysis GBP/PLN: the 5.10 target was reached. The next target is around 5.20-5.22. The slide under 4.97 should favor bears.


This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without the written permission from Sp. z o.o is prohibited.

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