Hungarian Forint: Holds firm against Euro below 371 - Societe Generale

Societe Generale analysts note EUR/HUF is trading within a base formation but continues to struggle with the 200-day moving average around 371, seen as crucial resistance. A break above this level is needed to confirm a larger upside move, while the recent pivot low at 359 is highlighted as important support whose loss could signal a renewed downtrend.

Base formation constrained by 200 dma barrier

"In CEE, Hungary headline CPI inched up marginally to 1.3% yoy in August from 1.2% in July and leaves the door open to for further easing by the MNB."

"That said, market focus has shifted away from near-term data following last week's Bloomberg report that the MNB is preparing to pause and potentially lower its inflation target as part of the longer-term path toward euro adoption."

"Attention will therefore be firmly on Thursday's press conference, where Governor Varga and Finance Minister Andras Karman may provide greater clarity on the central bank's thinking."

"EUR/HUF has been evolving within a base formation; however, it has struggled to reclaim the 200-DMA near 371, which remains a crucial resistance."

"A break above this hurdle will be important to confirm a larger up move. It is worth noting that the previous attempt to overcome this resistance failed in March."

"The recent pivot low at 359 serves as an important short-term support. A break below this could signal the resumption of the downtrend. "

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