CEE FX: Fade in EUR Provides Further Headwind to CE3 FX

The fade in the euro through the NY crossover has provided a headwind for the euro-proxies, with EURHUF and EURPLN extending session gains. Both stand around 0.4% higher at typing, above Friday’s best levels but still some way off last week’s highs (a full technical update can be found below). Regional drivers have been few and far between today, with focus shifting to preliminary CPI figures in Poland and the CNB rate decision later in the week. Major DM central bank decisions – Fed, BoJ, BoE – will also be closely eyed.

• For EURHUF, attention is on 388.82, the Jul 22 bear cycle low. Clearance of this level would highlight a resumption of the downleg that started Jun 14, and open 386.53, 76.4% of the May 28 - Jun 14 rally. Initial firm short-term resistance has been defined at 394.69, the Jul 25 high. Clearance of this level would be a bullish development.
• EURPLN traded sharply higher on Jul 16 and this was followed by a breach of the 20- and 50-day EMAs. For now, short-term gains appear to have been a correction. Key support and the bear trigger has been defined at 4.2471, the May 28 and Jul 15 low. For bulls, initial resistance is at 4.3044, the Jul 25 high. Key short-term resistance has been defined at 4.3321, the Jul 2 high.