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EURHUF Retraces Earlier Gains, Close to Flat on the Day

HUNGARY

EURHUF has reverted back to flat on the day, erasing the minor bounce to 392.27 post since the European open. HUF is mid-table among regional peers Wednesday, with ZAR the primary outperformer.

  • The more supportive global equity backdrop and smooth absorption of last week's ECB hike has been key to the HUF recovery since Monday, allowing the currency to revert higher despite relatively little domestic newsflow. Key support and the bear trigger has been defined at 372.38, the Mar 1 low, while initial firm support is seen at 387.77, the 20-day EMA.
  • Nonetheless, a resumption of the Dec - Feb downtrend remains to be seen. With HUF still carrying a sizeable risk premium, a further breakout of the US/Europe banking crisis or a negative market reception to the Fed dot plot today could re-open 404.35, the Jan 3 high and key upside level.

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