USDPLN has seen sustained support from the 2008 low of $2. The long-term outlook has witnessed two previous tests at a break to the downside; at $3.30 and $3.65.
A bullish divergence on the momentum indicator has seen prices bounce from the 61.8% Fibonacci handle of the 3.304/4.309 bullish leg. We now look towards the 50% for the first move to the upside, with 38.2% being the next level.
With the pair trading above $3.68, the bias is maintained towards the upside.
We look at the momentum for further clues for a hidden bearish divergence. This could see prices moving up towards the cluster while momentum diverges down. Should the cluster hold, then a break past the support line could bring fresh lows back into play.
The short-term outlook suggests further upside is expected as the momentum indicator shows two bullish divergence signals.
Prices are expected to test the 23.6% Fibonacci and move towards the median regression/trend line cluster. This area also highlights the 38.2% Fibonacci retracement levels of the bullish and bearish legs.
With prices confirmed at the $3.91 region, another push towards fresh highs could be expected unless we see the hidden bearish divergence come into fruition. Should this formation take place then the markets could consolidate until further signals provide more technical guidance.