EURHUF - from lower rangebound to triangle break soon?
This is not a trade idea, just a simple technical checklist on EURHUF, due to a request from a friend of mine.
Basically we have seen a heavy increase in weight of HUF since mid April-beginiing of May. However I have to note, that the big game was rather short USDHUF among professionals. Despite NBH cut base rate further and they still the same dovish, HUF managed to keep its relative strength ag EUR. Not so much against USD, where we already see a serious correction from the lows and may see an upbreak soon as well. (so likely those who measure funds' positionning were pretty much right saying investors got really loaded on USDHUF shorts). Especially not so much against PLN, which as a major peer to HUF performed extremely well recently. (There's some divergence starting between the two countries monetary policies)
Market was also positionned a bit for a possible Fitch "upgrade", which did not happen last week.
So where are we now on EURHUF? Price has been moving in a tight lower range 302-305, where on the lower side we have a long term uptrend line against the upper side's short term downtrend line forming an appr. simmetric triangle. This triangle got tight enough, so within a week or so one side should be penetrated.
Given the MACD and Slow Stoch picture, and the fact that the longer time trend might be stronger, I think price will break on the upper side. However we have to see, that clearly looking at the Ichimoku components, EURHUF still has to be considered as bearish. Trades below the Cloud, T/K still bearish, only Chikou Span, which is about to touch price candles soon, suggests that the bearish trend may be loosing its momentum.
Major supp/res levels are: lower - 301,60, upper - 305 / 307 / 309.
In case price starts to move up, I think 309 will block the bullish move as the current Cloud is thick enough. Only breaking above 309 could open the way to a bigger bullish move higher.
My only recommendation now is to reduce or keep lower weight of HUF, (and HUF assets), espec against increasing USD and PLN weights in portfolios. I would not necessarely short HUF in big way, as it seems the ultimate global Bull after ECB can still give some support for the HUF as well, but my real opinion is that HUF will not show the best relative performance.
p.s.: Actually the only HUF denominated asset class what is damn cheap on all relative basis still is Real Estate, especially in the frequented areas of the Capital. But this is another story, not for technical analyses :-)
Basically we have seen a heavy increase in weight of HUF since mid April-beginiing of May. However I have to note, that the big game was rather short USDHUF among professionals. Despite NBH cut base rate further and they still the same dovish, HUF managed to keep its relative strength ag EUR. Not so much against USD, where we already see a serious correction from the lows and may see an upbreak soon as well. (so likely those who measure funds' positionning were pretty much right saying investors got really loaded on USDHUF shorts). Especially not so much against PLN, which as a major peer to HUF performed extremely well recently. (There's some divergence starting between the two countries monetary policies)
Market was also positionned a bit for a possible Fitch "upgrade", which did not happen last week.
So where are we now on EURHUF? Price has been moving in a tight lower range 302-305, where on the lower side we have a long term uptrend line against the upper side's short term downtrend line forming an appr. simmetric triangle. This triangle got tight enough, so within a week or so one side should be penetrated.
Given the MACD and Slow Stoch picture, and the fact that the longer time trend might be stronger, I think price will break on the upper side. However we have to see, that clearly looking at the Ichimoku components, EURHUF still has to be considered as bearish. Trades below the Cloud, T/K still bearish, only Chikou Span, which is about to touch price candles soon, suggests that the bearish trend may be loosing its momentum.
Major supp/res levels are: lower - 301,60, upper - 305 / 307 / 309.
In case price starts to move up, I think 309 will block the bullish move as the current Cloud is thick enough. Only breaking above 309 could open the way to a bigger bullish move higher.
My only recommendation now is to reduce or keep lower weight of HUF, (and HUF assets), espec against increasing USD and PLN weights in portfolios. I would not necessarely short HUF in big way, as it seems the ultimate global Bull after ECB can still give some support for the HUF as well, but my real opinion is that HUF will not show the best relative performance.
p.s.: Actually the only HUF denominated asset class what is damn cheap on all relative basis still is Real Estate, especially in the frequented areas of the Capital. But this is another story, not for technical analyses :-)
