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Nagy Comments Offers HUF Some Reprieve Ahead of Tomorrow's NBH Decision

HUF
  • EURHUF has seen a slight dip in recent trade amid comments from Economy Minister Nagy, taking the cross to a daily low (but with current price still well above last week’s lows). Nagy said that while changes to central bank law are still on the agenda, the law change will be delayed until the Autumn with the Hungarian cabinet in talks with the NBH in order to respect its independence.
  • Concerns over the proposed law and its implications on central bank independence led to a substantial rally in EURHUF earlier this month, resulting in the cross reaching a cycle high of 399.75. Consequently, many sell-side analysts have revised their calls for the size of the NBH rate cut tomorrow, given the instability will justify a more cautious stance. Our full preview for that decision will be released later today.
  • Technically, conditions in EURHUF are unchanged and bullish with the latest pullback considered corrective and attention still on the 400.00 handle and key resistance at 402.45, the Mar 20 2023 high. Initial firm support lies at 394.09 the 20-day EMA. While this level has been tested, a clear break is needed to expose the 50-day EMA at 390.49.

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