EUR/HUF: Break below 348.65 to open the way towards the 345 level – SocGen

FXStreet Insights Team FXStreet

The forint has rallied for four straight weeks against the euro since the MNB last tightened in July. Looking ahead, economists at Société Générale expect the EUR/HUF pair to edge lower towards 345 and 340 by the first and second quarter of the next year, respectively.

A rebound towards 352.50 is on the cards

“In EM, the consensus-beating 2Q GDP expansion of 2.7% QoQ and 17.9% YoY in Hungary cemented the case for a third rate increase by the MNB today. A 30bp move would lift the policy rate to 1.50%, the highest in the EU. PM Orban’s economic advisor Nagy upgraded the growth forecast to about 7% this year from c.5%.”

“Short-term, the EUR/HUF pair has pulled back towards a multi-month descending trend line at 348.65, also the 78.6% retracement from June.”

“A rebound towards 352.50 and graphical levels of 356.10/356.70 is likely.”

“In case 348.65 breaks, the pair could head lower towards 344.90 and more importantly towards the lower limit of the range at 342.85.”

“Our house forecast is for EUR/HUF to stabilise around 350 before declining further to 345 by 1Q22 and 340 by 2Q22.”

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FXStreet Insights Team

FXStreet

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