Hungarian Forint: Key 360 area supports consolidation against Euro – Societe Generale

Societe Generale analysts describe EUR/HUF as consolidating above the 360 area after an interim low near 348 in June. The pair is capped by the 200-day moving average at 370/371, with a breakout above this zone needed to confirm a larger up-move. A break below the recent 359 pivot low would raise the risk of a deeper decline in the cross.

Key levels define next HUF move

"EUR/HUF carved out an interim low near 348 in June. A rebound has since materialized; however, the pair has so far struggled to overcome the 200-DMA at 370/371."

"A breakout above this zone will be crucial to confirm the onset of a larger up move. The recent pivot low at 359 is an important support. In case this gives way, there could be a risk of a deeper decline."

"In CEEMEA, we expect the MNB to leave the policy rate unchanged at 5.50% today following three 25bp cuts. Higher energy prices, the stronger dollar, Fed and ECB tightening have turned the screw on financial conditions and diminished the room for manoeuvre in Hungary."

"The more important development could be a potential reduction in the inflation target from 3.0% to 2.5%, underlining Hungary's longer-term commitment to Eurozone convergence."

"Our base case is for policy easing to resume in December and continue gradually through 2027, lowering the policy rate to 4.50% next year. EUR/HUF is consolidating above the 360 area."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)