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EURO / HUNGARIAN FORINT REFERENCE RATE

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EURHUX trade ideas

EURHUF - Smaller waves on a quiet market, longs preferredDaily: The major trend is still bullish for this pair. As you see the multi-year bullish trendline (light green) now stays together with a very important horizontal key support ard 301,80. From the 2014 top of 317 EURHUF has developed a counter trend with obviously decreasing waves. If I am right, we see the 4th wave right now, so short term the indication is buy, especially that Slow Stoch and MACD gave buy signals same time too. On MACD we also have a positive divergence. The short term counter trend "bullish" Price target is a , as wbig question, as we have a very thick Kumo above Price, and also future Kumo components still point down. This wave I think can last until 308-308,50, but from there we shoukld see the fifth wave down to minimum previous bottom or even to the major 301,80-302 support. To understand HUF, you need to know about few fundamental forces behind the sceenes. The private households FX loan conversion is a done deal, so in terms of HUF bearish risks this is out now, as Commercial Banks won't have any hedging needs, they do not have to buy EURHUF as the NBH gave all the necessary FX for them. However politically the Government may have a bit of headache here, as the conversion happened at a fixing of 309, so it would not be very easy to communicate to voters how well they were bailed out if by some reason HUF strengthens a lot from here until Feb/2015, when the conversions and loan re-calculations will efectively take place. Besides this, Hungary is highly involved in the global FX war, especially that as a small, open, export oriented country its competitivness depends a lot on relative FX valuation. CPI is at all time low there (partially artificial, but thats a different story, and anyway, core CPI has decreased further, so weaker FX is not a problem, may even help budget income side a bit too. On the other side the Government has been "fighting" another enemy: Keeping the budget ballance within 3 % of GDP and more importantly to keep Debt to GDP lower than previous year's basis. For this reason a rather "stronger" HUF is welcome until 31/Dec, but from Jan/2015 HUF wekness will be "preferred" by decision makers. The direction of EURHUF will depend a lot on global mood and risk factors. In shocks HUF can be vulnerable, as the multi-year positive carry is not supporting HUF any more, the base rate is at record low (2,1 %), and NBH will try to keep it as low as possible for as long as possible. (they have multiple reasons). But in case there won't be global black swan events causing mkts meltdown, HUF weakening can be limited, especially until Hungary keeps its CA surplus. Conclusion: I would be a buyer of EURHUF on dips, until the major trend and macro fundamentals do not change the big picture. If we see a dip to 302, there probably I would try to load a bigger size long.
Long
by Kumowizard
EURHUF - Counter long over, Bearish wave resumesPrivate household loans conversion story is over. The local banking system got the necessary FX 7,8 bn EUR from the NBH today, and what is more important, the conversion took place at mkt rate (exactly at 308,97). This means in short term not much left to put pressure on the HUF. Daily: Slow Stoch and MACD turning down. After Kumo retest (almost touched 311) Price is breaking back below Kijun Sen and attacking the secunder trendline. Getting closer to year end, the Hungarian Government would like to see EURHUF rate as low as possible to meet the steady Debt to GDP criteria. Next resistances are at 302,70 (horizontal) and 301 (primer trendline). It will be possible to reach these, but from now it really depends on global risk appetite, as no local story in the pipeline. 4 Hrs: Price failed to stay above 310, Tenkan/Kijun made a weak bearish cross and Price action today ended in a Bearish Kumo breakout and trendline break. DMI turned bearish and momentum (ADX) is picking up. Sell retests now ard 308-309.
Short
by Kumowizard
EURHUF - Early bird catched the wormHopefully not too early, but it looks more and more like a good buy soon for a 311-312,50 tgt. Daily: Trendline and horizontal support holds, MACD and Slow Stoch both up. 4 Hrs: Price is still below Kumo, but it printed a higher low today, which means the probability of double bottom is increasing. If it breaks higher, measured tgt from this pattern will be 312 - 312,50. DMI is still bullish and Slow Stoch is turning up from oversold as well. Short term equilibrium Px determinde by Kijun Sen and Senkou B is 307,30. (Daily Tenkan Sen is there too). This is the level to watch for a good risk-reward long entry.
Long
by Kumowizard
EURHUF - At major decision pointMy last long EURHUF trade was not triggered as Price quickly dropped back below 4 Hrs Kumo. By now Price reached again key levels, where price action of next few days will be very important. Daily: After almost perfect Kijun retest Price fall back to bullish trendline and horizontal Key support. DMI opened back to bearish, but this is less relevant until ADX is decreasing. MACD almost crossed bullish, but back to flat. SLST up, then down, no reliable information now. In terms of Ichimoku this pair had some bearish bias so far, but if fails to clear the previous key support/resistance ard 304-305, it can quickly become sideaway again, and might even reverse up. The flattening of averages may point towards this scenario too. All lines are getting flat, which means EURHUF is loosing both short and longer term bearish momentum. 4 Hrs: We had a false bullish break last week, Price dipped back below Kumo. Tenkan/Kijun made a medium bearish cross, but still Chikou Span could not cross back below Price candles. After reaching previous low, there was no follow through, so it dod not have a lower low, and SLS turning back up. It is a big question here if we'll see a double bottom? If the answer will be yes, then on next break attempt EURHUF will really tgt 312-312,50 Lower support is 305, upper resistance is 308. Basically we have to watch this 4 Hrs triangle in next few days. If it breaks there will be a quick move in the direction of the break.
by Kumowizard
EURHUF - Possible swing long setup / republishedSorry, I forgot to attach daily chart in previous post. Daily: As EURHUF is a less liquid pair, there are lot of noise and long wicks sometimes on candles. This often makes a bit difficult to draw a proper trend. You can notice that I had to adjust the bullish trendline that I draw in my previous post. This dark kreen line seems to be more reasonable, as it has more touching points. And of course this also means that the short term bullish trend was not penetrated as I saw it last time. Anyway, even though Ichimoku setup is bearish, for a valid continuation of the Kumo breakout strategy price should clear prevuious key support, which is basically 303,50-304,85. It may happen later, but not now. Since my last post not just Slow Stoch, but almost MACD is bullish too, and also DMI lost its bearish bias. Yesterday there was some buying in this pair due to global risk off sentiment, but in the afternoon Price came back lower. Still for me short term it looks like a buy on dips, with a possible tgt to retest 312 level. 4 Hrs: This time frame is getting interesting now. Tenkan/Kijun made a weak bullish cross, then Price tried to break rthe Kumo and the 4 Hrs bearish trendline, but couldn't make it for first time. Price is back to the Kumo, while Tenkan is still above Kijun Sen, Chikou is above Price candles and DMI lines are bullish and widenning with high ADX. For me it looks like a buy here, initial stop below 306, tgt 312 - 312,50. Actually if we trade it in a conservative way, the buy entry should be a stop buy at 308,30, when it really starts the move above trendline and the Kumo. Also Slow Stoch bullish turn will be a good trigger signal.
Long
by Kumowizard
1
EURHUF - possible swing long setup, tgt 312, stop at 306Daily: As EURHUF is a less liquid pair, there are lot of noise and long wicks sometimes on candles. This often makes a bit difficult to draw a proper trend. You can notice that I had to adjust the bullish trendline that I draw in my previous post. This dark kreen line seems to be more reasonable, as it has more touching points. And of course this also means that the short term bullish trend was not penetrated as I saw it last time. Anyway, even though Ichimoku setup is bearish, for a valid continuation of the Kumo breakout strategy price should clear prevuious key support, which is basically 303,50-304,85. It may happen later, but not now. Since my last post not just Slow Stoch, but almost MACD is bullish too, and also DMI lost its bearish bias. Yesterday there was some buying in this pair due to global risk off sentiment, but in the afternoon Price came back lower. Still for me short term it looks like a buy on dips, with a possible tgt to retest 312 level. 4 Hrs: This time frame is getting interesting now. Tenkan/Kijun made a weak bullish cross, then Price tried to break rthe Kumo and the 4 Hrs bearish trendline, but couldn't make it for first time. Price is back to the Kumo, while Tenkan is still above Kijun Sen, Chikou is above Price candles and DMI lines are bullish and widenning with high ADX. For me it looks like a buy here, initial stop below 306, tgt 312 - 312,50. Actually if we trade it in a conservative way, the buy entry should be a stop buy at 308,30, when it really starts the move above trendline and the Kumo. Also Slow Stoch bullish turn will be a good trigger signal.
Long
by Kumowizard
EURHUF - Simple, and being relatively easy to read recentlyDaily: A longer term daily uptrend seems to be broken. Price below Kumo, Tenkan below Kijun and all averages point down, Chikou is below Price and also below Kumo now. DMI is bearish with increasing ADX. You see, even a ccy on which everybody was super bearish can suddenly reverse... with no carry at all. When something looks sht, just look ard, and you realise it is still better than PLN or CZK. Always believe to the charts!!! Never fight what is obvious. To be honest I missed the initial 312,50-313 break, but as the Kumo was thick below the Price then, it retraced. So I opened a zero cost put structure selling 4 Months Call @316 vs buying 4 Months Put at 307,50. Now Slow Stoch has become really oversold, and bearish momentum (price action) chilled on lower time frame, and EURHUF is approaching a key horizontal support/resistance zone ard 303,50-304,50. Also the long term weekly bullish trend line, and weekly Kumo bottom is close at 301, which should be a very strong resistance. A short termpull back to 309-309,50 is not impossible. So I decided to Sell same notional amount 302 Put for same value date. This way if we stay below 316 until maturity, the position will be in profit anyway. (in case of a bullish reversal of course position would need some delta hedging between 316-318). 4 Hrs: Still bearish in all details, but in case of a pull back a retest tgt will be 307-308, or in case something goes wrong, and a counter trend against daily chart takes place it can be 310-311 as well. Weekly: The weekly trend is still bullish until price stays above Senkou B and the long term trend line. In case at any point this trend breaks without making a new high, then a double (or triple) top pattern would get confirmation and next weekly bearish tgt could be 287-290. But for now looking purely at Ichimoku setup it is rather becoming neutral on the weekly chart. Most important is 301!
by Kumowizard
2
EURHUF - Had some chance, but low rates matterEURHUF looked to step out of it's prev range on the downside. It broke below 312,50, and had a chance to move as low as 307,50-308. However the Kumo bottom (Senkou B) proved to be a strong resistance during this corretion and stopped further strengthenning. Price is now back to first key level at 312,50, flirting to break back above it. Daily: Price in the Kumo, neutral. Will become bullish again if moves and closes above 312,50. Slow Stoch again proved to be the best indicator to give signal in time! Frankly speaking, since I use Ichimoku, I give less relevance to Slow Stoch in general (often misleading), but not in the case of EURHUF. On this exotic par Slow Stoch is still very reliable. MACD started to point up too. All in all Looking at the daily chart it, the picture is neutral, with maybe some bullish bias. 4 Hrs: Ichimoku tells us it is neutral between 311,50-313, but DMI-ADX puts bullish pressure on the cross. We also had a weak bullish Tenkan/Kijun cross on Friday, so holding short is not a good idea any more. Well, to be honest low rates really do matter. So as a strategy on EM ccys, I use HUF now rather as a funding ccy, which means I rather buy EURHUF on dips and then I try to sell EURTRY on spikes, making some synhtetic TRYHUF long position on legs. While EURHUF has no positive carry, EURTRY 6M implied is ard 8,60-8,80 % p.a.
by Kumowizard
EURHUF - Swing down is possible, but how deep?Daily: Chikou Span hit Price candles, while we had a multiple resistance at 316 during last weeks. Slow Stoch down, MACD bearish too. (MACD has shown bearish divergence for a while). Price broke below Kijun Sen, Tenkan/Kijun can give a weak bearish signal soon. Key resistance to be cleared before it can drop further is 312 - 312,50. That would open the space to 309,50 or maybe even to 308, but there we have the long term bullish trendline. 4 Hrs: Bearish Kumo break and short term trend break. DMI crossing bearish. First resistance is ard 312, below that it is open. p.s.: fundamentals for the HUF are not really good, also it has lost the positive carry due to deep rate cuts and the change in 2 weeks instrument by NBH. This means HUF will be more and more sensitive to both local and global factors. The short term path will of course depend a lot on ECB decision today. If they ease further, that will send EURHUF down quickly. If they kind of "disappoint" mkts, then EURUSD will spike up, which will put pressure on USDHUF, so even in this HUF has some chance to appreciate a bit more.
Short
by Kumowizard
2
EURHUF - When things get boring a bit.Looks like EURHUF is not reacting to anything. When general sentiment is bearish, HUF is not really weakening, when things go all bullish, it can not strengthen either. Daily: small up and down moves above Kijun Sen. Ichimoku setup is still bullish, but for last two weeks it seems EURHUF struggles to break above 315. MACD has been bearish for a while, SLow Stoch not giving any signals really. DMI lines converging, ADX is dropping. Maybe odds are a bit higher than 50:50 for the pair to finally move lower to 308,50-310 supports. But do not forget anbout the fundamental fck ups Hungary's policy makers have done so far. Around 308 I think we'll have to look for buy opportunities again, staying with the long term bullish trend. 4 Hrs: Consolidation below Kumo top, with clear refusals ard 314,60. Low ADX shows too there's no trend at moment on this lower time frame. Weekly: Bullish trend with first support at 309, and strong support ard 305. However from the reversal weekly candle printed 2,5 weeks ago, a pull back to lower levels in this trend is not impossible. Chikou Span also hits Price candles, which gives indication either for a pull back, or for some sideaway moves on the weekly time frame.
by Kumowizard
EURHUF - Remarkable hanging man on weekly chartEURHUF is not an easy cross to trade. It can be really volatile from time to time. But as a strategic game I like betting on it. Last week's price action was very interesting and based on the weekly closing I am less bullish for EURHUF now. There are not yet signals for a short trade, but may worth to do some top hunting. I put on a weekly time frame as well this time. Let's have the checklist. Weekly: We have a long lasting bullish trend, with a kind of long term "wedge" developing same time. Long term Ichimoku setup is still bullish, but last week's candle is remarkable. It was a big hanging man. Any time we have something like this, EURHUF starts a correction within next 1-2 weeks. Slow Stock stuck in overbought level, meanwhile DMI lines started t converge a bit, and DI+ is below ADX now. Weekly trend and Kumo support is ard 305 - 306. Daily: Ichimoku setup is still bullish. After the 6/Aug pin bar EURHUF pulled back and retested Kijun Sen. During the pullback 316 proved to be a strong resistance. MACD is close to a bearish cross, but no signal yet, and Slow Stoch bearish too, but may turn back on any spike. On daily chart the big question now is if the cross can print any new high, or can make any daily close above 316? If not, it will likely carry out a volatile interim top building, and in this case sell on tops can be a good strategy for an expected correction down to 309,50. 4 Hrs: This lower time frame is mixed now. In fact it shows consolidation. Price trading in/around the Kumo, still below Kijun Sen. Tenkan/Kijun still weak bearish. Chikou Span is below/At Price candles. ADX dropped below 20, so the lower time frame trend is out of steam, DMI is a noise. Upper resistances: 314,60 (Kijun Sen), 315,40 (future Kumo top), 316,30 (previous Chikou Span peak). More importantly lower support is: 312,30, which is in line with daily Kijun Sen. Summary: Long term this pair is still bullish trending, but there are signs it may build some interim top here. The wedge top seen on daily and weekly chart should hold, unless some black swan blows this totally up. For those looking to short I'd suggest top hunting between 315,50-317,50. The problem with a 4 Hrs counter trend signal in this case is that by then we'll have a firm sell signal (e.g. break below 312,30) the risk reward compared to this products volatility won't be too good. So rather try to monitor Price action ard 315,50-316, which is also appr. 50 % retracement of last week's candle, and try to sell the tops in case. BUild the position in really small clips, and do not allocate too much capital in total. You can never know what happens to global risk appetite, and HUF can become really vulnerable as it has no substantial positive carry any more to protect it in case.
by Kumowizard
2
EURHUF - can spike to 315+, but we'll see a pullback, then buy!Fundamental update: EURHUF is no doubt very bullish. Actually I think any pull back is a buying opportunity. Basically no positive carry any more for HUF. RM loaded on local ccy bonds FX unhedged! Few days ago again HUF denom long end bonds were trading -20 bps to same maturity foreign ccy REPHUNs. NBH finished with easing cycle, but they managed to press the front end of the curve both in T-Bills and swaps to extreme low, since from August they stopped issuing 2 weeks NBH bills, they introduced again the 2 Weeks NBH deposit as their main tool. This means international can not place HUF liquidity with the NBH any more (they used to do it through local banks) and also this instrument is less optimal for local banks due to technical factors. So while base rate is 2,1 %, the T-Bills got smashed down to ard 1,50-1,60 % already. The liquidity is forced out of the NBH. I expect the bond curve to steepen further, and this steepening will be a bearish steepening this time. Then later NBH won't have any other chance but to hike again... so a bearish flattenning will hit in next year, but with the whole curve being under pressure from now! Sell your bonds in Hungary (if you have) buy floaters, or just leave it. From now on HUF will be very vulnerable to any local or global risk, and very volatile too. Technicals: Daily: Price is reaching a key resistance ard 315 - 315,25. It can even spike above that a bit, but given the Slow Stochastic (which in case of EURHUF is a really great indicator) we'll likely see a quick pullback from these 314-315 levels to ard 310. Actually it is not impossible that we'll see the same kind of choppy volatile trading that we had in Jan-March, but the base will be higher 310-311. 4 Hrs: Bullish trending, but ADX is very high, and is above DI+ now. It will need to correct down soon. Support is 310-310,50. Strategy: Only for those who are long still. I'd partially take profit (more clips) in 314 - 316 area, wait for a pull back and rebuy closer to 310. Important Note: This ccy is only for those who have any real exposure to Hungary. EURHUF is really illiquid with relatively wide bid/offer, and can become extremely volatile too. Hard to place entry and stops, or at least ATR based position sizing has to be adjusted often.
by Kumowizard
4
EURHUF - Decision time at Kijun SenAfter 10 days sideaway move, it is time to decide on HUF. My bet is EURHUF will pop from here again, tgt 315-316. Daily: Ichimoku setup is absolutely bullish, the question is only where to enter long. So far it looks like 10 days of consolidation was enough only for a Kijun Sen retest. Slow Stoch gives a buy signal. What is also important that with next spike Chikou Span will break above Kumo too, giving further confirmation for the bullish trend. 4 Hrs: Sideaway so far. Just because price came below Kumo, it has not become a valid Kumo breakout, as Price could not even penetrate the short term Key Support. ADX is also super low, means instrument is not trending. DMI corssed bullish, with a price break above Kumo again, and with ADX picking up, it will turn bullish on 4 Hrs time frame too. Idea: Buy EURHUF. Pls check previous posts as well on the link below. p.s.: Anyway, why would you hold HUF? All fundamentals are against HUF now.
Long
by Kumowizard
3
EURHUF - Buy the pull backsBy now EURHUF is trading above the Kumo, while all other indicators are in bullish mode too. This means the bullish trend looks finally resumed. What can we expect here? I think despite the bullish setup, a pull back is due here as the cross reached an important first resistance ard 310, and also daily Slow Stoch is at overbought level. The pull back tgt based on both the daily chart and the 4 Hrs time frame can be ard 307,50. That is a good support now and likely a good entry area to trade in line the re-newed bullish trend. So you can take partial profit here and try longs again between 307-308, but going short is not a reasonable risk-reward, and not recommended at all. The next price target for the major bullish trend is going to be 312,75 - 313,25.
Long
by Kumowizard
1
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.
Long
by Kumowizard
1
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 :-)
by Kumowizard
EURHUF - what's left to hit? Close short, go long until you can!Seriously I don't understand what the hell can be so attractive in the Goulash currency. Nothing has changed and I think nothing will change in economy policy there after the elections. I talked to some of my friends who work as fx spot traders or rate traders in bank treasuries, asked them what do they see or hear from major customers, what are the idea behind HUF strength. Most of the answers were funny, but what I liked the most was: "this is a re-newed carry trade, on the back of emerging and periferia bond spread compression idea". OMG! What the hell is the carry here? Adjusted with the basis, etc, it is maximum 1,8 % if you look at the front end rates. What's even better is that as I heard and checked myself too, Hungary's USD denominated 2023 maturity bond is trading only 35 basis points below the same maturity HUF denominated issue. (USD at 5 % yield vs HUF bond at 5,35 %). I discussed it with a very good friend of mine, who I respect a lot and who I think is one of the best professional experts, and he called my attention to one more thing: besides this compressed spread, USDHUF trades at same level as e.g. 16 years ago! So tell me now, where is the carry here??? Is 35 bps enough risk premium to hold a 10 year local ccy bond there? Sorry for being too long and too much fundamental, but this points to one thing again: greed rules everywhere now, investors, global realmoney and hedge fund managers lost their mind. Eveybody underestimates risks eveywhere, markets have become ignorant all around. Everybody is just chasing performance, yields, while they should realise by now, that at current pricing levels nothing is really attractive compared to risks (neither stocks, nor EU periferia or emerging bonds, etc). Actually there is no real alternative cost by now, and that means one thing: cash is king. And now back to technicals: Seems EURHUF has built a kind of base between 304-305,5. Daily: price got blocked slightly below the Kumo at this horizontal key support. Slow Stoch (which is still,very reliable indicator on EURHUF) is about to give a buy signal. 4 Hrs: a trend break is very close, price can easily make a Kijun Sen cross, which will be likely followed by a weak bullish Tenkan/Kijun cross too. DMI also supports a correctiive bullish reversal. I really doubt HUF could be resistent further to risk off sentiment. And I also have a feeling that yesterdays reluctant price action suggests everybody is loaded with HUF, so mkt positionning is short EURHUF and short USDHUF now. I already bought some yesterday, and I think I will add to longs now. First target is 310.
Long
by Kumowizard
3
EURHUF - Buy wave soon, buy the dip or the Slow Stoch signalAfter breaking below prev. range bottom, EURHUF started a new consolidation phase within the daily Kumo. Since daily Slow Stoch is oversold and will be turning to bullish soon, I recommend to close all shorts and start looking to accumulate small contra longs in 306-307,50. (stops to be placed below 305). I expect a wave up to 310-311 levels next. Maybe it can go to 312 as well, but the Kumo is thick, and as I wrote before in the last post, the Ichimoku setup has changed on the daily, so I do not expect the rally to last for long.
Long
by Kumowizard
EURHUF - Some interesting changes in technicals!Despite fundamentally HUF is the weakest chain among EM ccys, technically we have interesting change now which we have to pay attention to! Daily: DMI crossed bearish, MACD has had massive negative divergence for some time now, Tenkan/Kijun printed a bearish cross (weak sell signal as happened above the Kumo), the higher lows of the chanel (which is the same as the 4 Hrs uptrend line) is broken too, and price started to penetrate the Kumo. Future Kumo started to point down. The horizontal 308 support is still there, and also it is oversold on 4 Hrs (Stoch turning up). Trading is always about the probabilities, so let's see what each side can expect. Bulls: if you want to go Long from 308-308,50, well it may be ok, but Place your stops tight, 307,50-307,75. Another Long strategy can be to wait and see if price comes lower into the Kumo retesting 305 levels, and in line with daily Slow Stoch turning up, swing buy only from that level, with tgt 310-311, keeping in mind that price will start a Kumo consolidation. Bears: Wait for a bounce back to 311,50-312, and look for shorts setup only there My feelings: if price breaks below 308, that means Chikou Span will drop below price candles too. From that point the range will be gone, and price very likely enter a new range 305-310 and starts consolidation in the Kumo. Since the Kumo is thick enough I don't think it can quickly drop to 303 trend support. Anyway, playing bullish trades, betting on the current range to stay, has a lot more risk from now, so trade it only with half units. My bias somehow turned a bit more bearish on this cross (i.e. HUF to perform better). Sure enough, this cross was never easy to trade, but from now it will be even more difficult. All in all, I decrease my 100 % bullish bias, that I have kept since 297-300 levels.
by Kumowizard
EURHUF - Has it become a managed ccy?Long term I am still very bullish for EURHUF, but hey, look at this range which still persist! Who is on the top? For me it looks like policy makers do not want to see it a lot higher than 314-315. General election is due on 6th/April, so I would not be surprised if there have been some "silent intervention" behind the curtain. (btw as far as I know NBH ccy reserves decresed recently by a few hundred million EUR). ... but this is all a guessing ;-). Anyway it is good for a short now with initial tgt 310. Be quick, as this one is always moving super fast. As I called your attention in my previous pots regarding EURHUF, NBH has still a lot of reserves to keep volatility lower, while they are still incredibly desperate to cut benchmark rate as low as possible (ZIRP? :-D). However long term I think HUF will become under real pressure, and will suffer same way as TRY. Btw, I am thinking a lot about how we could make a good strategic short on huf, and recently I started to examine TRYHUF. I will try to post stg on this later, as this issue will be very very important for professional fund managers (real money and hedge funds as well) very soon as Hungary is doing an extremely dangerous monetary policy, while it has weak fiscal policy and a huge debt still. Basically NBH is going against the EM rate cycle that has already started (hikes everywhere). This will have consequences. But as I said, for now SELL small and buy double size at the range bottom :-). This has been the good risk reward trade for weeks now.
Short
by Kumowizard