The 5 years long range in the EUR/PLN is still in play. Since the start of 2011 this pair has moved without a clear trend or direction. We opened 2012 at 4.4464 and we're currently quoted at 4.1782. This is around 6 percent, a negligible price difference for several years of trading in the forex market. Most currency pairs moved that much in a two-three months.



If that doesn't convince you of the mean reverting nature of this pair then take a look at the blue line in the chart above. This is the 200-week moving average for EUR/PLN and is now quoted at 4.2399, only around 1 percent away from the current price quote. This means that the current price is 1% away from the average during the past 100 weeks or around 2 years.



Our final chart above shows that mean reversion is prevalent on the lower timeframes as well. Because of all of the above betting on the Polish Zloty staying near the current price at 4.1787 seems like a prudent decision.
Translate to English Show original