USD/PLN 1H Chart: Ascending Wedge
The US Dollar is trading in an ascending wedge against the Polish Zloty. It might be assumed that the given pattern has reached its maturity that might result in a breakout this week.
Ascending wedge is a continuation pattern that should guide the pair southwards, breaching a support cluster formed by the 55– and 100-hour SMAs circa 3.6430. A possible downside target could be set near the 3.62 mark—a level reinforced by the 23.6% Fibonacci retracement, the 200-hour SMA and the weekly PP.
The aforementioned limit may likewise work as a reversal point after which the pair could make a retracement to the bottom wedge line. However, in case bears prevail, rate may fall down to the weekly S1 near 3.59.
Ascending wedge is a continuation pattern that should guide the pair southwards, breaching a support cluster formed by the 55– and 100-hour SMAs circa 3.6430. A possible downside target could be set near the 3.62 mark—a level reinforced by the 23.6% Fibonacci retracement, the 200-hour SMA and the weekly PP.
The aforementioned limit may likewise work as a reversal point after which the pair could make a retracement to the bottom wedge line. However, in case bears prevail, rate may fall down to the weekly S1 near 3.59.
The US Dollar has depreciated substantially against the Polish Zloty since December 2016. The pair was trading in a steep channel down for the last few months.
This bearish sentiment, however, diminished slightly when the rate reached a two-and-a-year low at 3.5166. Thus, the steepness of the descending channel was altered to the upside. Technical indicators suggest that a reversal should being in the upcoming hours. The pair might still push north until the upper channel boundary and the weekly R2 near 3.6145 before edging lower.
The nearest significant support is the monthly PP at 3.5880. This area might hinder the pair; however, no massive changes in the down-trend is expected to occur until the 55– or 200-hour SMAs are not reached.