Analysis of GBPPLN Currency Pair for comming weeks

6月18日

Current Price and Recent Movements

Today, we are analyzing the GBP/PLN currency pair. Currently, the price is at 5.13 PLN for 1 GBP on the weekly chart. The price has declined from a high of 5.20 last week. We anticipate one more upward move towards the resistance line at 5.25, a level that previously served as a high in April 2020 and as multiple supports from where the price bounced. This makes 5.25 a strong resistance, as broken support often turns into resistance.

Resistance Levels and Market Expectations

Additionally, at 5.27, there is a crossover of a previous support line that was broken, alongside a downtrend line crossover. This aligns with the expectation that the National Bank of Poland (NBP) will hold rates slightly longer, while the Bank of England (BOE) is expected to cut rates this year. A rate cut expected from the Federal Reserve (FED) and a recent European Central Bank (ECB) rate cut mean PLN could have better returns. Furthermore, peace talks between Ukraine and Russia could fuel PLN as investors might move into less secure currencies with higher interest rates.

Economic Indicators

Poland's GDP for Q1 2024 rose by 0.5%, surpassing the forecast of 0.4%. Although the UK also experienced above-forecast GDP growth, uncertainty around the UK elections has a more significant impact on the currency. The UK's private debt to GDP is at 160%, compared to Poland's 102%, which is significantly higher. Poland is raising its minimum wage twice a year, compared to the UK's once a year. The rapid growth in Poland's minimum wage fuels inflation, prompting the NBP to potentially raise rates again. In Q3 2023, the minimum wage in Poland was 811 euros (700 pounds), and by Q1 it rose by 20% to 977 euros (838 pounds). The next increase, expected in July, is projected to be around 2%, which will likely impact inflation as people have more money to spend.

Mid- to Long-Term Outlook

My mid- to long-term outlook for GBP/PLN is bearish, with an expectation that the price will decline towards the multi-year support at 4.60 PLN for 1 GBP.

Disclaimer

This analysis is for educational purposes only and should not be treated as a trading recommendation. It represents my view and anticipation of the market. Everyone should conduct their own analysis or seek advice from a financial advisor if considering an investment. This is not a trading recommendation, only a personal overview of this currency pair.