August 16, 2023 13:03 GMT
EURHUF Approaches Intraday Lows
- EURHUF is trading 0.65% lower at typing and is close to its intraday lows. Previously noted technical levels remain in play, with the 20- and 50-day EMAs marking the important support levels to watch. Topside resistance is seen at 394.67, the Aug 3 high. Clearance of this level would resume the uptrend. HUF is among the top performers in the EMEA FX space, despite little change in wider market conditions (major equities little changed, USD close to flat).
- Despite today’s losses, EURHUF sits ~0.8% stronger on the week, while technical conditions are still considered bullish. The recent uptick in natural gas forwards, triggered by labour disputes at Australian LNG plants and outages in Norway, could be providing an additional headwind to the HUF (see chart below) alongside the deterioration of risk sentiment in recent weeks.
- Sell-side desks previously noted that the rally in natural gas in early-June was partly responsible for the move lower in the HUF, though the correlation between the two has decreased since, and is therefore unlikely to be a primary driver of the forint now.