Friday’s trade saw EUR/PLN within the range of 4.0377-4.0081. The pair closed at 4.0262, up 0.03% on a daily basis, and settled the week 0.04% higher.
At 7:09 GMT today EUR/PLN was down 0.12% for the day to trade at 4.0216. The pair held in a daily range of 4.0198 – 4.0296.
Fundamentals
Eurozone
Destatis reported at 06:00 GMT that producer prices in Germany rose 0.1% in March for a second month but trailed projections for a 0.2% jump. Year-on-year, the Producer Price Index was at -1.7% compared to -2.1% in February, remaining in the negative area for a 20th straight month.
The Producer Price Index measures changes in prices of goods and services either as they leave the production process, or as they enter it. Unlike the CPI, which measures price changes from the consumers perspective, the PPI basically gauges the prices received by domestic producers for their output, or the prices paid by domestic producers for their intermediate inputs. The PPI performance may be an early signal for inflationary pressure in the economy. Generally speaking, a higher-than-expected PPI reading should be considered as having a bullish effect on the common currency, as it suggests accelerated consumer inflation, while a lower-than-expected result would have a bearish effect.
At 09:00 GMT Eurostat is to report on construction activity in the euro area for February. Seasonally adjusted construction output in the region increased 1.9% in January compared to a month earlier, while in annual terms, output expanded at a pace of 3.0% on a workday-adjusted basis. Annualized February construction output growth is projected at 0.9%. This indicator reflects how resilient construction sector development is and also provides clues over investment activity. Higher rates of increase usually provide a limited support to the common currency, while faster rates of decline usually have the opposite effect.
Poland
Polands annualized industrial production probably expanded at the annual rate of 7.2% in March, according to the median forecast by experts, following a 4.9% increase in February. If so, this would be the fastest rate of increase since December. The index reflects the change in overall inflation-adjusted value of output in sectors such as manufacturing, mining and utilities. In case industrial output expanded more than anticipated, this would have a bullish effect on the local currency. The Central Statistical Office of Poland (GUS) will release the official industrial data at 12:00 GMT.
Meanwhile, Polish retail sales probably rose by an annualized 1.5% last month, reversing a 1.3% drop the prior month. The retails sales gauge is the foremost indicator for consumer spending, which makes up the consumption part of the countrys GDP. The measure is not adjusted for inflation and services spending is excluded. The most volatile components such as autos, food and gas prices are often stripped out to show a more smoothed underlying demand.
Another report by the Central Statistical Office is expected to show that producer prices fell by an annualized 2.5% in March, compared to -2.7% in February and a record low of -2.9% in January.
Pivot points
According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 4.0240. In case it penetrates the first resistance level at 4.0399, it will encounter next resistance at 4.0536. If breached, upside movement may attempt to advance to 4.0695.
If the cross drops below its S1 level at 4.0103, it will next see support at 3.9944. If the second key support zone is breached, downward movement may extend to 3.9807.
In weekly terms, the central pivot point is at 4.0215. The three key resistance levels are as follows: R1 – 4.0500, R2 – 4.0739, R3 – 4.1024. The three key support levels are: S1 – 3.9976, S2 – 3.9691, S3 – 3.9452.