EURHUF - Where does the problem start for the HUF?
Or should we ask wether it has started already?
Fundamentally the negative effects have been piling up for some time now. The main problem in my view is the already super low interest rate environment with a still dovish CB, the totally disappeared risk premium (basically shorting HUF against quite a number of other ccys is a positive carry now on longer forwards too), the private sector FX loan issue, which will be shortly solved by the Government (pushing additional 400-500 bn HUF loss on Hungary' banking sector), the continously increasing debt of the country, etc. Of course there are some local positive factors, and the global super bullish, yield chasing sentiment, which still give some support for the HUF, but in grand total I think this is the only reason, that HUF has not yet blown up. Anyway, I still believe in technicals, price sooner or later will reflect everything. So let's see where technically the problem starts with EURHUF:
Actually a bullish trigger is very close. Everything points to the North.
Daily: DMI is bullish, MACD bullish, Slow Stoch bullish cross again, with positive divergence. Price is attacking the downtrend line right now, few days after retested Kijun Sen. In case Price breaks and stays above 308, HUF will be under pressure, targettin 312 and then 316 again. As I said in my other post few days before, just sell the HUF on any dips. This is still valid, and looks like will be even more valid in the future.
4 Hrs: Ichimoku is totally bullish here again after a Kumo bottom retest.
For those who own HUF assets, my advise is to swap back to EUR, USD, GBP, or into whatever you like, as it looks like a must to hedge the FX risk. Rates can stay low for long time, you can still own fixed income, but really it costs nothing now to swap your FX exposure back into hard ccy.
Fundamentally the negative effects have been piling up for some time now. The main problem in my view is the already super low interest rate environment with a still dovish CB, the totally disappeared risk premium (basically shorting HUF against quite a number of other ccys is a positive carry now on longer forwards too), the private sector FX loan issue, which will be shortly solved by the Government (pushing additional 400-500 bn HUF loss on Hungary' banking sector), the continously increasing debt of the country, etc. Of course there are some local positive factors, and the global super bullish, yield chasing sentiment, which still give some support for the HUF, but in grand total I think this is the only reason, that HUF has not yet blown up. Anyway, I still believe in technicals, price sooner or later will reflect everything. So let's see where technically the problem starts with EURHUF:
Actually a bullish trigger is very close. Everything points to the North.
Daily: DMI is bullish, MACD bullish, Slow Stoch bullish cross again, with positive divergence. Price is attacking the downtrend line right now, few days after retested Kijun Sen. In case Price breaks and stays above 308, HUF will be under pressure, targettin 312 and then 316 again. As I said in my other post few days before, just sell the HUF on any dips. This is still valid, and looks like will be even more valid in the future.
4 Hrs: Ichimoku is totally bullish here again after a Kumo bottom retest.
For those who own HUF assets, my advise is to swap back to EUR, USD, GBP, or into whatever you like, as it looks like a must to hedge the FX risk. Rates can stay low for long time, you can still own fixed income, but really it costs nothing now to swap your FX exposure back into hard ccy.
