Market trends continue to appear unshaken. The EUR/USD exchange rate has anchored above $1.17, but lacks the momentum to challenge recent highs. The U.S. dollar is also under pressure from the Polish zloty, making it difficult for USD/PLN to sustain a move above PLN 3.60. Meanwhile, EUR/PLN is narrowing its consolidation range, which for optimists could signal the approaching end of the current stagnation. Could the WIG20 be on the verge of breaking another resistance level?
Table. Highs and lows of major currencies and WIG20 quotes. Range: July 21–25, 2025
| Currency Pair | EUR/USD | EUR/PLN | USD/PLN | WIG20 |
|---|---|---|---|---|
| Minimum | 1.1617 | 4.2399 | 3.6088 | 2917.68 |
| Maximum | 1.1787 | 4.2596 | 3.6530 | 2965.96 |
EUR/USD
We begin with the world’s most important currency pair. In July, EUR/USD attempted a correction of its five-month uptrend, but this was quickly reversed. The pair failed to break below the levels from which the rally to the recent (and 4-year) highs above $1.18 began. This trading pattern can be seen as a strong signal confirming the resilience of the bullish trend. A decisive break of the trendline, confirmed by falling below the support area defined by a 1-cent channel above $1.145, would be a strong sell signal for the euro. At the same time, there is still a lack of momentum for a successful push to new highs, but this scenario remains the more likely one. A breakout above the resistance could ultimately pave the way to test the 2020 highs around $1.23.
USD/PLN
As is often the case, the USD/PLN rate mirrors EUR/USD almost perfectly. This means that the July correction essentially reaffirmed the ongoing downtrend. Once again, the return to the trend lacked the strength to retest recent multi-year lows. If no strong impulses reach the market in the coming (summer) weeks—traditionally characterized by lower volatility—the zloty may struggle to break the key support around PLN 3.58. On the other hand, the proximity of this level suggests that testing it is still more likely than a sustained move above local peaks near PLN 3.68. If the lows are broken, the dollar could head in the long term towards the 2018 lows around PLN 3.30.
EUR/PLN
Since broader market trends show little change, the same is true for the EUR/PLN, which is the most relevant pair from Poland’s perspective. The euro continues to trade within its preferred sideways trend. For those anticipating greater volatility, there is hope in the fact that the consolidation is gradually narrowing, which may signal an upcoming breakout in one direction. As the euro is leaning downward and considering the base scenarios for the pairs mentioned earlier, one might conclude that a breakout to the downside is more likely. In this case, a test of the support area above PLN 4.20 could lead to another drop of 5 groszy. However, if the market succumbs to euro strength, only a sustained move above the resistance at PLN 4.31 would invalidate the current consolidation, opening the way to last autumn’s highs near PLN 4.37.
WIG20
Finally, let’s look at the chart of Warsaw’s main stock index. While the last week was challenging for the Warsaw Stock Exchange, the past month has been a success for Poland’s blue chips. In just a few weeks, the WIG20 has climbed nearly 300 points, providing a strong example of capital flowing into major domestic companies. As mentioned, it is becoming increasingly difficult to generate further gains, but it is worth noting that the index hasn’t been this high in many years. The recent correction can therefore be viewed as part of the ongoing uptrend. Bears would need to break the support line set by the start of the latest rally to take control of sentiment. Meanwhile, bulls may see a flag formation developing, and its execution could trigger another strong upward move.
Author: Adam Fuchs, Currency Analyst at InternetowyKantor.pl
Source: CEO.com.pl
