The EUR/PLN currency pair is witnessing significant developments, marking an important shift in its trend. For months, the pair had been trading sideways in a well-defined rectangle pattern, with boundaries marked by yellow lines. This range-bound movement began in April 2024, and the market showed little directional bias until recent weeks.
Starting in December and continuing through January, selling pressure began to mount. The price was consistently testing the lower boundary of the rectangle, signaling increased bearish momentum. This pressure culminated in a decisive breakout to the downside, taking EUR/PLN out of the rectangle and into uncharted territory. As a result, the pair has now dropped to its lowest levels since January 2020.
With the breakout, the sentiment surrounding EUR/PLN has turned decidedly negative. The break below the rectangle’s support confirms a bearish outlook, and the current momentum suggests that sellers remain firmly in control. As long as the price stays below the rectangle, the sentiment will continue to favor the downside.
For traders, the only signal to shift back toward a bullish perspective would come if the price manages to reclaim the rectangle and close above its lower boundary. However, given the strength of the recent bearish momentum, the chances of a swift recovery appear limited in the short term. The pressure on EUR/PLN continues to weigh heavily, and the market seems poised for further downside unless a significant reversal occurs.
The focus now shifts to monitoring key levels below the current price, as traders look for signs of support or consolidation. Without a move back into the rectangle, EUR/PLN is likely to remain under bearish control. For now, sellers are firmly in the driver’s seat, with the pair at multi-year lows and no immediate sign of reversal.