PLN/HUF Approaching 50-DMA While EUR/HUF Breaches 395.00

EURHUF has extended the bounce off last week’s lows amid another firm showing by the greenback today, resulting in the cross breaching the 395.00 handle with initial resistance at 395.77, the Apr 2 high, now in close proximity. A stronger reversal higher could refocus attention on the key resistance and bull trigger at 399.75, the Mar 12 high.

• Given limited local news flow and data releases so far this week, the forint is likely to continue to exhibit sensitivity to global factors. Last week’s US CPI data and subsequent hawkish Fed repricing provided fresh USD demand (particularly as the ECB is still guiding towards a June rate cut), with elevated geopolitical angst surrounding the Middle East also factoring into weakness in EM FX.
• The near 2% rally in the USD index over the past week has led to notable weakness among the CE3 currencies, though the Polish zloty has underperformed in the space today. Consequently, PLNHUF sits 0.15% lower on the day at 91.44, closing in on the 50-DMA at 91.10. This level provided firm support on April 5 and is a level we have not traded below since mid-January.