Sideways Consolidation Then Continue To Completion Of GartleySideways Consolidation Then Continue Down To Completion Of Gartley Pattern. Below is the correct c point of the gartley pattern.......
USDHUX trade ideas
USDHUF - Looks topish a bit, flag break soonDaily: Long term Ichimoku setup is bullish. But it has printed a Hangin Man and a Doji in last two days. It can be either a further bullish flag building, or a confirming signal that the top is building here ard 235-236 for now. Slow Sotch is bearish, MACD gave a sell signal. Today Hungary's GDP was higher than expected. (3,9 % vs 3,5 % exp.)
Equilibrium price is 229,50-230. USDHUF may have a pull back down to the trendline or to the equilibrium support level.
4 Hrs: Price got stuck in a tight triangle, and trading in the Kumo (consolidation). Upper break would be above 235,30, lower break below 233,70. Chikou Span is at Price, and ADX dropped below 20, with tight DMI lines. All these tell us undecision and consolidation.
The flag break can happen in any directions, with almot 50-50 % chance. However given the daily MACD and Slow Stoch, the chance of a dip (correction) maybe a bit higher.
If you don't have any position in USDHUF, it is not wise to play the upper break and go long, as risk-reard after such a rally is not the best. However for a swing short it can be good below 233,70, with 230-231 tgt. Also if you have longs still, 233,70 is the level to watch for final take profit.
USDHUF - A dip to 223-224 support is possibleThis move and its depth depends on two components. EURHUF and EURUSD.
Fundamentals:
After yesterdays NBH comment the pressure on HUF started to ease. Fundamentally I don't see any possible local trigger, that could blow up the HUF now in next few months (Autumn might be a different story, but thats far away).
- NBH finished with easing cycle, they gave a forward guidance to keep bmrk rate at 2,10 until end of 2015. This Guidance itself is a joke I think, Hungary is a very small and open economy, still depends a lot on external factors and external funding. My view is that they will be forced to hike rates a lot sooner than mid 2015. They think and act like the FED :-). The only problem will be that they are cornering themselves, and their rythm on timings will be a problem at some point as FED and BoE start to hike.
- The conversion of private sector FX loans to HUF is off the table for now, will happen only next year. New info about the discount exchange rate, and about the details of the burden will come from Government in November. Until then NBH reserves are safe.
- C/A is still in surplus. Short term OK. However here we have to add that trade balance surplus started to decrease a bit recently, and with giving the money back to households next year, consumption will increase a lot. Import will jump. This will have a negative effect on FX first, and as later CPI will very quickly pick up due to consumption surge and base affect as well, very soon NBH will be forced to hike rates again.
Technicals:
Daily: Big inside bar pin bar yesterday, with bearish MACD and Slow Stoch signals. Ichimoku setup itself is still bullish, but ADX is too high, and when it is so, it often brings at least a consolidation. Supports are: 226,85 / 224 / 220,70.
There are two scenraios now. As EURHUF will likely stay offered, USD huf will depend on EURUSD moves and corrective spikes more. If EUR weakens ag. USD, then USDHUF will rather show sideaway consolidation, with no real selling momentum. However if we see a spiky correction in EURUSD bearish trend, that means USDHUF will quickly break the Kijun Sen and will likely retest the Kumo
4 Hrs: There are initial bearish signs, but the trendline and the Kumo held so far. DMI turned bearish, ADX looks like turning up, which means a possible gain in bearish momentum is ahead. We have a weak Tenkan/Kijun cross, with Chikou Span below price candles now. Clearly the horizontal support area 226,50 - 227 is in line with daily Kijun Sen. Once we see a break of trend and Kumo, confirmed with break of horizontal key support area too, we will quickly see the 224 or maybe 223 handle.
Suggestion: Take partial profit on USDHUF (also on EURHUF) longs for now in spikes and get ready for full profit taking on first support breaks. Increase HUF weight in portfolio again for short term. Going short as speculative position? That is upto your trading profile and risk tolerance. This pair is really volatile and hard to trade.
USDHUF - Where is the buy zone? Long if you see some more dip!Daily: Ichimoku setup is bullish - Price is above Kumo, T/K up, future Kumo bullish. The only missing part is Chikou Span to come over the cloud too. Also Senkou B (orange line of the Kumo) is flat both actually and in the future. This often attracts the price, so looking at 4 Hrs setup too, it is not impossible that we may see this swing down to ard 222 level. Slow Stoch and MACD also bearish on daily chart, which means the USD correction will affect USDHUF further as well.
Yesterday I got a call from one of my friends, who really shocked me with an information. He had to price a 5 year USDHUF forward (and/or 5 yr ccy swap). Guess how much is the fwd points for five years! It is ard 290-300, so basically that means 3 big fig is the "cost of carry"... lt me say again, for 5 YEARS! No more comments. It costs nothing any more to short HUF. And this is just one small piece of the puzzle, besides ultra loose monetary policy and the fiscal policy of the country which is defenately for the weak HUF. Sooner or later HUF will blow up.
By the way there's NBH rate setting today... again... 10 bps cut is likely, meanwhile Hungarian base rate is already below Polish. This alone doesn't mean anything, you can set a base rate anywhere, but then again something is wrong in the formula, so risk premium should be priced somewhere. My view is that it should be reflected in the FX.
So let's hope for more correction and then go for the buy side.
Support level is 221,50 - 222,50 area. I enter a price alert sub 223 and will re-check the tech setup again.
USDHUF - Waiting for a clear Kumo break on top sideThen we'll have a new tgt of 228-232 again.
As you see, this has been less bearish, what's more, has been printing mild bullish signals since mid May.
T/K bullish, Kijun retests three times held the price, may be trading out of the Cloud soon.
MACD, DMI, Slow Stoch bullish.
Please see the link below to EURHUF.
So if someone thinks about HUF shorts, I think the game is rather USDHUF. At least, now that looks technically a bit more prudent.
Recommendation: Buy it on dips between 221-222, add to longs on break above 224,80.
