HUF: Forint Moderately Lower Ahead of NBH Rate Decision

EURHUF is moderately higher on the session but remains close to this week's lows overall as we approach the NBH rate decision this afternoon. The central bank is expected to moderate the pace of easing to 25bps (from 50bps previously), with the scope for further easing beyond this month “very, very limited”, according to Deputy Governor Virag. With the NBH likely to accompany its rate decision with hawkish guidance, further HUF downside may be limited after French election jitters hampered sentiment across CEE last week.

• Despite the latest pullback, EURHUF is still trading within close proximity to its cycle highs. The recent rally reinforced a bullish theme and resulted in a break of a number of important resistance points. 395.73, 76.4% of the Mar 12 - May 28 bear leg, has been cleared. This signals scope for an extension towards 399.75 next, the Mar 12 high and a key resistance. Initial firm support is seen at 392.44, the 20-day EMA.