Polish stock exchange and zloty under supply pressure. Correction or the best is already behind us?

Since the peak on December 28, contracts for Wig20 they have already fallen by 8%, which is the largest correction since the period between August and October 2023. From the point of view of the chart, potential support for FW20 may be around 2200 points, and then at 2160 and 2130 points. The trend line, which runs from the low in October 2022 through the low in October 2023, may also be important. Here, in turn, the level of 2100 points could be crucial. Meanwhile, local resistance may fall around 2300 points. and at 2270 points. It seems that if the market were to start turning around, it would have to break through these levels. However, until this happens, supply pressure may still be visible.

Interestingly, the decline on the Warsaw Stock Exchange takes place along with the decline in bond yields. The yield on 10-year securities fell to 5% from 5,30% at the beginning of the year. Therefore, falling profitability, which in theory supports the stock market, is accompanied by falling share prices. This may show that investors do not see much potential in this market for now and prefer to have certain payments from the bond market.

Meanwhile, decline bond yields may to some extent explain the relative weakness of the Polish zloty, which also appeared along with the decline in share prices. The euro exchange rate rose to the highest level since November 20, i.e. PLN 4,38. Moreover, this morning it seems that the dynamics of the sale of the Polish currency is just starting to accelerate. From the point of view of the EUR/PLN exchange rate chart, the potential resistance may be at PLN 4,41.