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The US dollar is struggling to gain traction against the Polish zloty on Wednesday, January 21, 2026, with USD/PLN hovering around the 3.60 level after an extended decline through 2025. While the greenback has attempted a mild rebound in recent sessions, broader fundamentals continue to favour the zloty, keeping upside in the pair limited. The latest price action reflects a market caught between short-term dollar stabilisation and structural support for Central and Eastern European currencies, particularly Poland’s, which has benefited from solid domestic fundamentals and improving regional risk sentiment. Why the Polish Zloty Remains Supported The zloty’s strength is being underpinned by a combination of monetary credibility, resilient growth expectations, and geopolitical positioning. Poland has remained one of the more stable economies in the region despite ongoing uncertainty linked to Ukraine and broader European security concerns. The country’s proximity to the conflict has not translated into capital flight, largely due to strong fiscal positioning, continued EU support flows, and confidence in Polish institutions. At the same time, expectations that the National Bank of Poland will keep policy relatively tight compared to other European peers have supported carry demand for the zloty. Even as global rate-cut speculation builds elsewhere, Polish yields remain attractive, limiting downside risks for the currency. Improving sentiment toward the European economy has also helped. As recession fears ease across the euro area, investors have shown renewed appetite for regional currencies, allowing the zloty to outperform even as the euro itself remains rangebound. US Dollar Side Offers Only Modest Relief On the US side, the dollar’s recent attempt to stabilise has been driven more by position adjustment than conviction. While safe-haven demand has resurfaced in parts of the market due to global trade tensions, including renewed tariff rhetoric from Washington, this has not translated into broad dollar strength against higher-yielding currencies. Concerns around US fiscal discipline and political pressure on monetary institutions have continued to weigh on longer-term dollar sentiment, limiting the scope for sustained gains versus currencies such as the zloty. As a result, USD/PLN rebounds have so far lacked follow-through, reinforcing the view that the pair remains vulnerable on rallies. USD/PLN Technical Picture: Consolidation Within a Broader Downtrend From a technical standpoint, the USD/PLN daily chart shows consolidation rather than reversal. The pair remains well below its 2025 highs, confirming the dominant bearish trend. Price is oscillating near the 3.60 zone, which has acted as a short-term pivot. Momentum indicators have flattened, signalling indecision rather than renewed bullish strength. Key levels to watch: Support: 3.58, followed by 3.50 if selling pressure resumes Resistance: 3.63–3.65, with a stronger barrier near 3.70 USD/PLN forex pair on a daily chart on January 21, 2026. created on TradingView Unless USD/PLN can reclaim territory above 3.65–3.70, the broader structure continues to favour zloty strength rather than a sustained dollar recovery. USD/PLN Outlook The balance of risks remains tilted to the downside for USD/PLN. Poland’s relatively strong macro backdrop, combined with steady investor confidence in the region, continues to support the zloty, while the US dollar lacks a clear catalyst for a durable rebound. In the near term, USD/PLN is likely to remain rangebound with a bearish bias, with rallies viewed as corrective unless accompanied by a material shift in either Polish monetary expectations or global risk dynamics. Why is USD/PLN rising in early 2026? USD/PLN has moved higher as strong U.S. economic data and delayed Federal Reserve rate cuts continue to support the dollar. At the same time, geopolitical uncertainty in Europe has reduced demand for emerging European currencies, including the zloty. How does the Greenland dispute affect USD/PLN? While Poland is not directly involved, tensions between the U.S. and the EU over Greenland have increased broader regional risk. As an EU member, Poland is exposed to any trade fallout, which can weigh on the zloty during periods of heightened uncertainty. Can the Polish zloty recover later in 2026? Yes. Expected inflows from EU Recovery and Resilience Facility funds and a stable monetary stance from the National Bank of Poland could support the zloty later in the year. A de-escalation in geopolitical tensions would also reduce upside pressure on USD/PLN.