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HUF: EURHUF Extends Rally Towards Key Resistance, 400.00 Handle in Focus

HUF
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HUF has weakened alongside its CE3 peers at the start of Wednesday trade, with EURHUF (+0.25%) trading higher for the sixth consecutive session and up 1.5% compared to last week’s lows. Recent gains put key resistance at 399.21, the Aug 5 high, in immediate focus. A break here would bolster bullish momentum and could signal scope for an extension towards the psychological 400 handle.

  • Interestingly, the EURHUF vol skew has shown more in favour of puts this week as options markets continue to show diverging signals from rising spot. This is evidenced by the 1m EURHUF risk reversal edging below 1 point for the first time since May, with the decline broadly coinciding with rising ECB rate cut pricing over the past month.
  • Regional focus will be on the NBP rate decision later today, with communications from a growing number of policymakers having turned more dovish in recent months. More broadly, US NFPs at the end of the week will be closely watched, as well as any further escalation in Israel/Middle East tensions.
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HUF has weakened alongside its CE3 peers at the start of Wednesday trade, with EURHUF (+0.25%) trading higher for the sixth consecutive session and up 1.5% compared to last week’s lows. Recent gains put key resistance at 399.21, the Aug 5 high, in immediate focus. A break here would bolster bullish momentum and could signal scope for an extension towards the psychological 400 handle.

  • Interestingly, the EURHUF vol skew has shown more in favour of puts this week as options markets continue to show diverging signals from rising spot. This is evidenced by the 1m EURHUF risk reversal edging below 1 point for the first time since May, with the decline broadly coinciding with rising ECB rate cut pricing over the past month.
  • Regional focus will be on the NBP rate decision later today, with communications from a growing number of policymakers having turned more dovish in recent months. More broadly, US NFPs at the end of the week will be closely watched, as well as any further escalation in Israel/Middle East tensions.