February 21, 2023 12:13 GMT
EURHUF Remains in Technical Downtrend
- HUF has recovered from an intraday low against the EUR after some stronger than expected European PMI data lent support to the euro-proxy forint. Nevertheless, today's price action remains well within recent ranges.
- Technical trend conditions in EURHUF remain bearish despite last week’s move to a high of 387.40. The breach of the 384.43, the Feb 3 low, has confirmed a resumption of the downtrend and opens 376.06, a 1.236 price swing projection. Below here, 370.55 marks the 76.4% Fibonacci retracement for the 2022 upleg. Initial resistance is at the 50-day EMA that intersects at 392.86. A clear break of the EMA is required to signal scope for a stronger recovery - towards 401.20, the Nov 17 high.
- Local bonds mimic EUR/HUF in trading close to YTD lows in recent days. Focus turns to the NBH rate decision next week, although recent comments from Virag reiterated the NBH’s patient stance, boosting odds for rates to be held higher for longer.