Facts:

• President of the National Bank of Poland (NBP), Adam Glapiński, during yesterday’s press conference following the interest rate decision, said, quote: “I can’t be any more dovish”
• Next year, rates will be close to 3.5% (currently 5.75%), and this year Glapiński suggested 2 cuts of 50 basis points each (with a chance for an additional cut)
• EURPLN has already gained 1.60% since yesterday. However, the impact of the sudden change in monetary policy in Poland may affect the currency pair for a longer period.

Opinion:

Long position at market price

• TP: 4.35; 4.40
• SL: 4.15

Recommendation:

During yesterday’s press conference, NBP President Adam Glapiński surprised the market with an exceptionally dovish tone, saying directly: “I can’t be any more dovish.” Although interest rates remained unchanged at 5.75%, Glapiński clearly suggested possible cuts – two reductions of 50 basis points each later this year, with a possibility of another move, and by the end of next year, rates are expected to fall to around 3.5%. This is a radical shift in tone compared to previous statements, which had indicated a more distant outlook for monetary easing. The President’s declarations about falling inflation (CPI forecast at year-end: 4.2% versus the previous 4.8%) and the impact of the German economy on domestic macro conditions create room for an earlier start to the rate-cutting cycle – possibly as early as May, if upcoming macroeconomic data (CPI, wages, production) confirm the disinflationary trend.

The changed narrative immediately reflected on the market – the EURPLN rate rose by 1.6% within a day of the conference, showing how strong an impact such a shift in expectations can have. Although actual rate cuts haven’t started yet, the market is already pricing them in, and the impact of this change may shape EURPLN in the coming weeks as well.

Based on the above factors, we recommend taking a long position at market price. We also recommend placing a stop loss order to minimize the risk of potential loss.

Source: xStation 5

Methodology:

The recommendation is based on macroeconomic and fundamental analysis of the currency market. The outlook for the Polish economy was determined based on recent macroeconomic reports and the latest NBP conference, during which Adam Glapiński announced a decisive pivot by the bank. Target levels were determined using classical support and resistance levels and through Price Action ana

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