USD/PLN 1H Chart: Channel Up
- The American Dollar is trading against the Polish Zloty in two week long ascending channel that started to form after the currency exchange rate changed a direction and jumped through the 55- and 100-hour SMAs to the top.
- By the moment, it consists of four confirmation points, which means that it has reached maturity and might be broken in the nearest future.
- The breakout might occur even earlier, as the currency pair is simultaneously moving in a junior descending channel whose existence became evident after the buck failed to pass through the monthly PP at 3.6490 yesterday.
- On the other hand, the road downstairs is secured by the 200-hour SMA and the weekly PP at 3.6252.
- On the gradual surge to the top additionally point out traders’ mood, which is 72% bullish.
During the past weeks, the US Dollar has been trading sideways against the Polish Zloty. The pair’s trading range, however, has diminished, as it has failed to overcome the 3.6927 mark. As a result, an ascending triangle was formed.
Given the characteristics of this pattern, a breakout should occur to the upside, thus surpassing the highest level since mid-July. The Greenback should still push for the lower triangle boundary circa 3.66; however, its failure to overcome a support cluster set by the weekly PP, the 55-, 100– and 200-hour SMAs might point to a possible reversal.
Thus, two scenarios are possible. First, the rate could depreciate down to the lower triangle boundary and then make a reversal. Second, this breakout might come sooner if the aforementioned support cluster is not breached.
The upside target in this case could be the weekly R2 and the monthly R1 circa 3.7250.