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EURO / HUNGARIAN FORINT REFERENCE RATE

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EURHUX trade ideas

Goulash cannon reloaded?Well, actually the "Goulash-cannon" really exists!!! It was (is?) used by the Hungarian army for catering reasons. Basically they are cooking and store goulash in it. But let's see what's cooking in EURHUF? - Ichimoku picture is turning to bearish . Price attempts a bearish Kumo breakout. This also means a possible break of triangle's lower side. Supp/res lvls in focus: 310,50 / 309,25 - Heikin Ashi sell signal! Obvious bearish candle today with haDelta/SMA3 bearish cross below zero line. - if the lower (thick green) trendline goes broke, and price clears 308,50-309 level, then next tgt will be 303! I hold my increased HUF exposure and keep the risk reversal Put option structures opened earlier.
Short
by Kumowizard
EURHUF attempts a bearish reversalWho cares about zero carry any more? Direction matters, that's it. This post is a follow up to my earlier warning today on Twitter. Weekly: - The ccy pair did not match the criteria of bullish Kumo breakout in last few weeks. No higher high above Kumo. - Heikin Ashi is about to make a reversal pattern (of course end of week will matter). - Chance for a double top is increasing. - lower supp/res level and possible pull back tgts: 309 / 307 / 305 / 301 (as ultimate trend support) Daily: - Ichimoku setup turns back to neutral, Price attacks Kijun, 100 WMA and flat Senkou B line - Inner trendline is broken, lower trendline still acts as supp/res ard 310 - Heikin Ashi gave a sell signal yesterday, the signal is validated today. The bias is increasingly bearish, but we don't know wether or when it gains more momentum. Coming days will be very important, as FED decision may affect USDHUF which is trading ard critical last support of 276-277, and on Friday S&P will publish rating of Hungary. After 4 years spent in "Junk" category an upgrade to "investment grade" is not impossible.
Short
by Kumowizard
5
No story, no price action, no reaction. Double Top?EURHUF has become really interesting recently. Despite NBH announced to stop easing cycle in terms of base rate cuts (1,35 % right now), they kept and implemented other tools to boost indirect QE further. They closed 2 weeks depo facility, increased liquidity ratio requirements for commercial banks, and all together pusing cash liquidity out of NBH balance sheet they force banks to buy more HUF denominated government bonds into their banking books. What's more, they even provide IRS offers way below regular mkt rates on tenders, which banks can pay (this way hedging their fixed rate exposure) if they undertake the obligation of holding same notional amount of govt bonds as the notional amount of their interest rate swap paid against the Central Bank. The funny thing is that they can have any maturity mismatch, like paying 10y IRS vs buying and roling 3M T-Bills. All this Goulasch QE caused a rdical move in FX swaps too, first time in history USDHUF long has a positive carry quite long out on the forward curve! This means the positive carry of HUF vas USD or EUR not just disappeared, but is kind of negative now. And here comes the question: If there is no carry at all, what the hell is the reason behind such a low volatility in HUF? The Forint was extremely stable during the last few weeks of global risk off turmoil, it was hardly reacting to anything unlike for example some other G10 ccys (like CAD or NOK) did.... ok, Hungary is not an Oil producer :-D... but compared to any other EM ccys the relative performance of HUF was remarkable too! The other question is if NBH has any special and silent target? Don't forget, this Central Bank and its President's concept is quite unorthodox in terms of monetary policy. Reasons may be: still extremely high level of C/A surplus, expected rating upgrade of Hungary later this year (although credit already trades a lot better than a BB S&P, Ba1 moody's rating), very high level of Central Bank reserves, maybe commercial banks already frontloaded bond purchases in last few months. But most importantly -> there is no special story right now regarding Hungary! Probably not really in focus. Technicals: Weekly: - Ichimoku picture is neutral. price reached important resistance area ard 315-317. - Heikin Ashi shows loss of bullish momentum this week. No higher high, chance for an inside body, with haDelta/SMA3 cross down. If risk sentiment globally improves a bit, we may see some slip back to lower supports from here - Strategic key reversal point is coming higher: long term bullish supports are now ard 305-306 / 300-302 Daily: - Ichimok is still bullish, Kijun Sen is still a bit too low for a reversal signal. - Heikin Ashi however shows some undecision, as previous top could not be reached either. haDelta/SMA3 zig-zag at zero line. Is it building a double top ard the multiple resistance of 317? - Lower supports are at 312,50 and 311. Breaking below 310-311 would validate a possible double top on daily with measured tgt to 300-302.
by Kumowizard
EURHUF - Multi week bull over, but correction slows down tooThere will be NBH rate setting meeting tomorrow. Mkt expects further 10 bps cut and a new all time low base rate. It is still very obvious, that Hungarian policy makers do not want to see too much HUF appreciation. Maybe they tolerate 300-305, but there they would likely come up with some new innovative idea to weaken their ccy. (like they did last time) Weekly: - I think this picture is neutral now, hard to understand price action relative to averages - Price is shaded by Kumo ahead, Tenkan/Kijun still weak bullish, Price trades between these two averages, still above 100 weeks WMA. Chikou Span is at past candles. - Heikin Ashi is bearish, with sime tiny momentum slow down. Daily: - Quick and agressive correction from the top pushed Price below Kijun Sen, actually down into the Kumo cloud and to 100 WMA. The current Kumo is still very thick below, which means 305-308 is a strong supp/res zone. Tenkan and Kijun are almost at same level ard 313,30, which is a strong upper resistance now. - Heikin Ashi is still bearish, but after haDelta hit an extreme low, it started to correct towards zero line, which means the candle bodies are smaller and smaller each after. - The momentum of drop decreased, we will likely see some sideaway consolidation or a pull back towards 312. I think it is wise to close some shorts. So that is what we have technically. Besides that we have a very dovish National Bank, which is trying to use any tools that can cause a smooth and further weaking of the HUF, but on the other side they have way too much FX reserves, which needs to be offloaded in the future. C/A is still very positive, and I don't really see anything what could deteriorate it. That is appr. 800 mio EUR/month inflow to Hungary. Bond market is kind of safe, with a continously steepening bond curve, and with a lot of focus on increasing weight of domestic funding. Actually 3-5 years maturity retail CPI linked floaters provide annual coupon of past year CPI + 3,5 %, compared to bank deposits and short T-Bills at or below 1 % p.a. Meanwhile the "shut down" of 2 weeks NBH deposit facility from September forces commercial banks to load more HUF denom bonds on their books. All in all the domestic demand is enough now to counter any international selling, or portfolio outflow. I think for some time it is very likely that EURHUF will stuck in 305-315 range. On the lower side NBH will be active, but the upper side is also limited to shocks, as we saw during the Greek crisis HUF did not really become too volatile. I also think NBH would be happy with an annual 3-4 % HUF devaluation on average, so they can also be active on the top side (closer to 320) with some FX reserve selling (silent intervention)
by Kumowizard
1
EURHUF - From now, short has a better risk rewardBut at least it is really time to take profit on longs as I already suggested in my previous posts. Weekly: - Ichimoku setup is neutral. Price action slowed down at weekly Kumo and Kijun Sen. - Heikin Ashi signals possible end of bullish wave: long wicked doji candle, haDelta/SMA3 turning down (still above zero line) - lower supp/res area is 305-307. Below that it will cause a headache again to NBH (National Bank of Hungary), which still would ike to see a slowly weakening HUF. Daily: - Ichimoku setup started to lose its strong bullish bias. A close below Kijun Sen would indicate more selling, and in that case price will likely enter the neutral zone in the Kumo. - Does anybody remember the "CRAWLING PEG" in Hungary? Well, the price action in last two months looked exactly like that, but now the short term bullish trend channel is broken, and we arrived to the pull back phase. EURHUF is targetting the daily Kumo again. I think there is good chance to revisit 305 +/- area. Heikin Ashi signal is bearish, more confirmation comes below Kijun Sen. 4H: - Bearish Ichimoku and bearish Heikin Ashi setup with lower low print after horizontal break. - Sell any pull backs around or above 310.
Short
by Kumowizard
1
EURHUF - The perfect trend channel in danger! Nice tech picture!This bullish trend is generally one of the most perfect I have ever seen in my life, and probably the most perfect I have ever seen in case of EURHUF! Look at the 4H chart in the right panel: not just the lower bullish trendline is touched tick by tick every time, but also the upper channel line is more or less perfect! Now we have a very good question here: will Price pop up one more time, or will EURHUF break this perfect trend and pull back to lower daily supports? Daily: - Bullish Ichimoku setup and bullish trend - Heikin Ashi has a warning signal: price could not make a higher high in last three days, yesterday candle was a doji (hesitation), followed by a red candle today, which has kind of long body. haDelta/SMA3 is coming down, may enter subzero area, HA Oscillator turns bearish! - Lower supports are: 307,50+ (Kijun Sen) / 305 (Future Senkou B) / 302 (current Senkou B - Kumo bottom) 4H: - Bullish trendline, 100 WMA and Kumo being attacked, Ichimoku setup turns neutral. Weak bearish Tenkan/Kijun cross. - possible bearish DMI cross, but it has to be validated by Kumo and trend break - Bearish Heikin Ashi signal, which looks like being validated by a new haDelta/SMA3 bearosh cross below zero line. You have to watch the following on 4H time frame: 1. If Price breaks trendline, 100 WMA and Kumo, then take profit on all your longs left. Wait for a pull back and go short in 311-312 area with possible 307 initial tgt. 2. If Price doesn't break the supports now, watch for the next swing high: if no higher high and you'll have a valid Heikin Ashi sell signal on 4H, then Sell first unit, then increase short when you see the breakdown finally. Do not guess now, just follow rule 1. and 2.!!! Buying it now is not a good risk-reward, not even by the fact we know about NBH monetary policy and their will to push their ccy weaker. In case Price action and signals tell you it is a sell, then sell it short term. Longer term you may look for better risk-reward (cheaper) Bullish entry around daily supports mentioned above.
Short
by Kumowizard
EURHUF - A dip before rip?Weekly: - After breaking a multi year trendline and Kumo, Bears faced resistance at 297 and a correction started. By now Price reached the Kumo and slightly below Kijun Sen, Chikou Span hit past candles again. Ichimoku Setup turned back to neutral. 309,50 - 311,50 area should act as stronger support/resistance. - It is the 8th week of the correction, Heikin Ashi signal is still bullish, but haDelta/SMA3 quantification started to show some exhaustion in the bullish momentum. Lower supp/resistances: 305,70 / 302,70 / 297 Daily: - Ichimoku setup is still bullish, but Chikou Span faces a strong resistance in the thick past Kumo. Price is also very close to 309-311 resistance zone. - Heikin Ashi started to show serious undecision close to resistance. For 5th consecutive days Price could not break above 309,50. haDelta/SMA3 has been drifting lower, close to zero line now. In short term I think the upside for EURHUF long is a bit limited, Price may dip to 302,50-304,50-305,50 supports. On the other hand NBH as main policy maker made clear again they would be happy with rather a weaker (slowly weakening) HUF in the long run. So who knows, maybe later this year we'll see a rip, but now we can see some dip. To get some cover, I bought risk-reversal Put options already. I also sold some plain vanilla covered Calls.
by Kumowizard
1
EURHUF - What policy makers don't want to seeThat is a stronger HUF! They really do not want to see EURHUF a lot lower. In a small and open economy like Hungary, FX rate has a lot of relevance. And you can be sure about that Hungarian policy makers will do all they can to prevent further HUF stregthenning. Anyway, they do not even hide their intention, for example NBH representatives clearly point that in interviews, they want weaker HUF and they cut rates until "needed". You could say it was/is problematic in Czech Republic too, but Hungary is a different story. In Hungary it is not so difficult to weaken a bit the ccy if this is the policy makers' need. They will have a lot of other tools left even if they can not cut the base rate further. Please allow me not to give any ideas here :-) I don't say EURHUF will blow up, but in the global ccy war the Hungarian decision makers I think would like to see a 2-3 % avg annual depreciation. Let's have a look at the technicals. Weekly: - A long term uptrend line was broken. The Ichimoku setup is bearish, but so far the previous horizontal key level ard 297 was not yet cleared. That's needed for a bearish continuation, and for a confirmed bearish Kumo breakout. - Heikin Ashi candle last week already showed slowing bearish momentum. This week it looks like even a pull back is possible. haDelta/SMA3 further up. - I think there is chance to retest the weekly Kumo and previous trendline ard 306+lvl. 306-310,5 zone however is becoming a strong bearish support. Daily: - Ichimoku setup is slowly losing its very bearish bias, but still has to be considered as bearish. This can change to neutral if Price breaks back above Kijun Sen and second possible trendline (301+) - Despite Heikin Ashi candles were designed to filter as much mkt noise as possible, you can see that in case of EURHUF even this filtering is hard to achieve. Yes, this is a noisy ccy of a noisy country, and not easy to trade. But when it moves, it can move a lot and quickly. For now the Heikin Ashi signal is slightly bullish biased, but for more bullish move haDelta/SMA3 should come back above zero line and Price needs to close above 301-301,50. - Upper supp/res levels: 301,50 / 304 / 306
by Kumowizard
EURHUF - Consolidation. Counter long above 300,20Daily: - For the last 8-9 trading days EURHUF has been moving in an extremely tight range - Heikin Ashi candles are almost all dojis, with both upper and lower wicks. haDelta/SMA3 is stuck ard zero line - Ichimoku setup is bearish, but the flat Kijun Sen may attract Price back towards 304-305, in case it breaks above Tenkan Sen and the trendline (300,20 - 300,75). - Please note that Slow Stoch and MACD are both turning up. This is often a reliable signal in EURHUF. 4H: - Kumo is getting thinner ahead. - Ichimoku setup is neutral and Heikin Ashi signals are mixed. No trend. Price is close to 100WMA. - Price will move sharply soon. From recent setup we can not decide clearly which way. For a counter bullish move towards 304-305 it should break above 300,20, or the other way for bearish continuation it should finally close below 298. Given the daily setup, especially the MACD-Slow Stoch dual signal I assume we'll rather see some bullish Price action ahead. I enterred small long today, looking to add more if 4H lvls break. p.s.: NBH representatives made clear last week they are ready to cut base rate further "as long as necessary". For me this looks like NBH feels a bit uncomfortable with the relatively strong HUF. They have the tools to weaken it if they wish. Hungary still has quite some external debt, so do not consider HUF as CZK. Anyway, the market has to take that call as well. If the market still wants to push it lower, it will do so. But at least this time we can place a relatively tight stop for the long positions below 298.
by Kumowizard
EURHUF - NBH rate setting meeting in focusHungarian Central Bank will have MPC rte setting meeting next Tuesday. Most of analysts expect the NBH to re-start (continue) its easing cycle in some form, as most of the central banks do globally. Polish Central Bank cut base rate a few weeks ago, Hungarian will likely follow them and all the others. Let's check the technicals! Weekly: - Price tried to break the long term trend line (since 2008) and the weekly Kumo three times during last few weeks. But until no close below Trendline, Kumo and horizontal line (means no lower low) the trend break and reversal attempt will be only a false signal. - Weekly Ichimoku setup is neutral: Price in the cloud, Chikou SPan is below past candles but above the Kumo. Tenkan/Kijun has been in weak bearish cross for some time, but both averages are still above Kumo top. - Heikin Ashi candle for this week is rather bearish, but as you see the last three candles (including recent one) rather express undecision with down-up-down pattern. - Weekly bullish key reversal would be a spike or close above 307,45 with haDelta/SMA3 confirmation above zero line Daily: - Ichimoku setup can slowly turn back to neutral. Actually due to increased vol Tenkan/Kijun is in weak bullish cross - Price tried to break the lower resistance of 302,50-302,75, but all the three attempts failed. - Heikin Ashi candle today signals a bullish reversal, haDelta/SMA3 cross increases the chance for more bullish move in coming days. - Daily key level is at the Tenkan/Kijun/Trendline conjunction: appr. 305-305,50, but with a close above 306 the space will be open to 310 or maybe even to 313 again. - Watch Chikou Span cross for confirmation later. Close shorts and go long some EURHUF with stop below 301. Initial tgt 309-310. It will be very important to see wether ERURHUF can make a higher high in coming months. As if it can't, later the next attempt to break the long term trendline will succed. please also note that the future Kumo made a bearish cross (26 weeks ahead), and future Senkou B is lower now. I think 313,50 - 316 will be a strong resistance on the top side.
Long
by Kumowizard
3
EURHUF - 310 again?Weekly: - After a decent drop fro 7 weeks, last candle had both upper and lower wicks. So far it looks like Kumo bottom and weekly major uptrend line managed to hold. There is also a resistance below Chikou Span in the past Kumo. It is very obvious, that for a major trend reversal Price should break 302 and 300 as well on the weekly chart. - Price may be stuck in the Kumo for a few more weeks, which in terms of Ichimoku is a neutral territory. Recent Heikin Ashi candle is green, still within the body of previous candle. haDelta is marching up, trying to cross back above zero line. - Very likely we will see a spike again towards Kumo top or Kijun Sen to revisit 310-313 levels. Daily: - Price is below the Kumo, but could not make a lower low two days ago. Kijun Sen got down to Price, a cross above Kijun would allow Price to go higher. Chikou Span also lost its open space, and the Kumo started to overshade Price candles too. - Heikin Ashi candles show short term undecision, but as haDelta still have a positive divergence and is about to cross above zero line, it is a bit more likely that we'll see higher prices in coming days. Oscillator is bullish too. In case of a Kijun cross, first bullish tgt is 310, second tgt is 313.
Long
by Kumowizard
1
EURHUF - What can't go down...... will go up... or will trade sideaway Daily: - Ichimoku setup is bearish, but bearish bias is decreasing a bit. 304-305 resistance holds, MACD lines converge. - HA candle has a very small body today, haDelta crosses up, but the question is still the same: can it come back above zero line? Anyway, there is some positive divergence in haDelta lows. 4H: - DMI losing bearish bias again, while Price is still stuck in a triangle. - bearish supports and reversal points are: 306,50 (ard Kijun and 100 WMA) and 307,45 (trendline and Kumo) - Heikin Ashi setup is more bullish again I still keep small long with a stop below 304. Looking to increase if breaks above 307, with 310-312 tgt in focus.
Long
by Kumowizard
1
EURHUF - Double bottom at key resistance?Weekly: - Ichimoku setup is neutral with Price in the Kumo cloud. Price reached a strong trend and horizontal support - The week has just started, but will be important to see how the candle develops as right now haDelta suggest the weekly bearish momentum could decrease again. haDelta may cross above SMA3 after a really low print few weeks ago. - Lower support is 304-305, upper resistances are at 315 and 320. Daily: - Ichimoku Setup is still rather bearsih on the daily, but it looks like the Key Resistance which we discussed last week holds very well. Price got very far below the Kumo and Kijun Sen, which means a pull back towards equilibrium levels is getting more likely. - Last week the 309,70 finally blocked the pullback. On a next possible spike that level will still act as bearish support, but with less strength, as the lower (4H) time frame will have no further support by then (pls see dets below) - HA Candle today has a smaller body within the prev candle's body, but still no upper wick. haDelta is crossing above SMA3 and pls note that haDelta has some bullish divergence with three valid points now. This also increases the chance that the resistance holds further and we may see correction towards 310, or higher. 4H: - Price back below the Kumo and Kijun Sen, but again ard 305,50 - 306 we see some hesitation. If it ends in a double bottom, then on the next spike we'll see a trend and Kumo break. Anyhow, the decision time is getting closer as the triangle has become extremely tight: upper level to watch is 308,10 and 309, the lower level is obviously at 305. - Recent candle has a small green body and haDelta is crossing back above SMA3, the cross happens above zero line - The Kumo is very thin above Price, would be easy to break through So what is the point here? 304-305 is an extremely important strategic level now! I see somehow more chance for a short term bullish move from here. The risk-reward is not too bad to go long for 312 (maybe 315) tgt, as we can put on a very tight and reasonable stop below 305. Of course if by some reason this 304-305 breaks at any time, that would be a real game changer for HUF, as then a very long lasting uptrend breaks down. We have to be flexible in our thinking.
Long
by Kumowizard
1
EURHUF - Close all shorts, open small long againDaily: - Slow Stoch buy signal, MACD lines are converging - Yesterday we had a Heikine Ashi reversal candle with small body and long wicks. Today's HA candle is green. haDelta crossed back above SMA3 and breaching above zero line. - Chikou Span reached past Kumo and turnign up again - Short term supp/resistance is daily Tenkan Sen at 308,90 4 Hours: - Ichimoku setup is changing to neutral from bearish. Weak bullish Tenkan/Kijun cross. DMI lost bearish trend bias. Weak - Green HA candles in a row, followed by some small body candles which mean short term pause, but haDelta is turning back above SMA3 and this cross is happenning above zero line, so the chances are better for more bullish move. - Short term supp/res is at Kumo and 100WMA around 309. EURHUF is losing its heavy bearish bias. We will see some consolidation around 306,50-308,50, and very likely a spike to the daily Kumo, to 312-314 area. Watch Price action at 309 key level for further indication and bullish confirmation. I closed all my shorts, enterring some long, with stop below 305.
Long
by Kumowizard
4
EURHUF - Resistance zone. Partial TP on shorts!I think EURHUF we have to consider as sell on tops for the close future, but as it has reached a key resistance zone, I suggest to take partially take profit on short positions / reduce HUF exposure. Weekly: - Ichimoku setup is back to neutral from bullish, with Chikou Span comeing back below Price candles. Price reached Kumo and key horizontal support. The major trend is still up. - HA candle colour is red on the week, but haDelta looks like crossing back above SMA3 from a relatively low level. This means that last three weeks sharp selling may ease next week, and probably we'll some range consolidation or pull back to higher levels again. Daily: - Decent bearish move sent Price below Kumo. The Future Kumo is bearish, so the strategy will remain sell on tops. However Price reached key horizontal resistance and short term uptrend line, while it has got far away from Kijun Sen (In these cases Kijun and Senkou B often attracts Price back a bit towards equilibrium). Chikou Span got to the lower level of past Kumo. A pause here or some kind of pull back is very likely. - HA candles do not yet show the signs of reversal, only haDelta behaviour is strange a bit, looks like the bearish momentum softens a bit as it can not print lower lows. I take profit on half of my short positions and try to catch a pullback. Even if we break lower by few big figs as next move, probably from 304-305 we will see pull back later. Where to re-sell it is a good question, let's see how it behaves during next week.
by Kumowizard
EURHUF - Daily and 4 Hrs bearish momentum drops, swing upPlease see my latest calls and ideas about EURHUF through the links below. What has changed in last two days? Daily: - The Kumo and horizontal resistance ard 309,75-310 blocked further bearish move as Price got oversold - Slow Stoch is about to deliver a bullish signal (this indicator is very reliable in EURHUF when the signal happens at key levels) - Heiken Ashi candle may signal a reversal too, haDelta crossed above SMA3 after printing an extreme low. - Support/resistance area is between 315,50-317,50. There we have to watch for Slow Sroch and haDelta signals again. Be careful with long EURHUF trades, as the main picture has been changing: weak bearish Tenkan/Kijun cross, overshading Kumo, neutral/bearish Chikou Span from now. As I wrote in my previous post, I'd rather look for short entry at key levels if I see any sell signals. 4 Hrs: - bullish HA candles, haDelta is again above SMA3, both lines managed to stay above zero level - DMI bearish bias is lost, close to a bullish cross - Chikou Span losing its open space - However the Kumo is thick, providing strong bearish suppor between 315,50-317,50 Note: NBH rate setting due today. Market is pricing in further rate cuts for the future. Wether it happens today or later, or if it happens at all, no one knows. Anyway, we have to trade on Price action rather than belief.
Long
by Kumowizard
EURHUF - Reached key support, cover shorts, sell again laterWeekly: The main trend is still bullish, with trend and Kumo support around 305-307 area. This will be very important to watch in the future, as due to ECB QE at some point even EURHUF may break this long term trend. In case we see a weekly close below 305 in the coming months, that would open space down to 285-290. Heiken Ashi candle changed colour this week, with haDelata crossing back below SMA3. This means one thing: do not go long EURHUF as a strategic trade! Daily: The price drop was as quick as the spike before. Volatility has increased a lot. (It's not surprising as it has increased generally in FX mkts) Price reached key support/resistance at 309,75-310 at the Kumo and horizontal key level. The Heiken Ashi candles are red with long bodies, no upper wicks, and also haDelta/SMA3 is bearish, but haDelta prints an extreme low. Also Kijun Sen still points up. I think this support should hold for few more days, and we should see some pull back to ard 314 level, but if the cross higher from here, we have to look for selling opportunity again! Why? Because the weekly HA picture is turning bearish, and because the daily Ichimoku setup is turning into neutral/bearish as well: soon we'll have a weak bearish Tenkan/Kijun cross, Kumo overshades Price, and Chikou Span is hitting Price candles (even if Price moves up again, Chikou will cross below candles) Summary: cover some shorts now and try to re-sell it ard 314-315.
by Kumowizard
EURHUF - Chance for a swing downDaily: Knee jerk bullish breakout on the day of SNB decision quickly faded. Why? Simple: Hungary doesn't really have FX risk exposure as the smart Government has already converted all CHF based private household loans to HUF at the end of last year. With not much FX risk left for the country, the pressure on HUF is limited. Short term their macro figures are not that bad, especially the C/A surplus is something that can help HUF strength from time to time. Slow Stoch is bearish, MACD is bearish and most importantly Kijun Sen moved up close to recent Price candle. Also Chikou Span is losing open space a bit. We may still see some range trading between 318-321 before it can start a swing lower. How does Heiken Ashi picture look like? (mid panel) After a reversal candle signal two days ago HA candles changed color to red, however today's candle has a small upper wick again. It says the bearish momentum has not yet started to accelerate. But if we look at haDelta, there we can see it has been below SMA3 for some time, and by now both lines are below zero key level. So the chance for a bearish extension is increasing. 4 Hrs: Well, after some consolidation yesterday and today it looks like there is good chance for a bearish Kumo breakout. Slow Stoch turned down again, Price is trading below 100WMA and attacking a very thin Kumo. Future Kumo made its bearish twist and Chikou Span can soon cross below past Price candles too. The key resistance area is 317,30-318. Strategy: Close existing longs, start to short smalls in spikes, size up position with a decisive 4Hrs Kumo breakout.
Short
by Kumowizard
EURHUF - Local top. Pull back to come / Chart with Heiken AshiWhile the long term daily trend for EURHUF is still bullish, I see very high probability that we have the local top in ard 320, and EURHUF will start a correction lower soon. Let's check the levels. Note: to filter volatility and noise I use Heiken Ashi candles this time. Daily: Price reached trend channel top at/above 320. It was a decent and quick move from the 306 low, it has become overbought. Slow Stoch has been deverging for a few days and is signalling a sell, MACD is likely joining it with a sell signals too. These too signals together are very strong, and also Heiken Ashi candle is changing to Red. A pull back is very likely to happen within next few days. First weak Bullish support is the Tenkan Sen at 317,33, the more important stronger supports are at Kijun Sen and the horizontal support/resistance line ard level 312,50-313. Noze that Senkou B is at that level too. I think in short term 313 can be the corrective tgt. 4 Hrs: Perfect bullish channel, but Price action is coming back to neutral from bullish. Red Heiken Ashi candles have been printed in a row and Chikou Span is hitting Price candles. Theoretically this time frame should be still considered as bullish, but remember, always the higher time frame dominates, and the Daily is not really supporting further short term bullish momentum. The 4 Hrs Slow Stock is low, and as Price is at Kijun Sen, trendline, horizontal support and Senkou B together, I think it won't be able to break down for the first attempt. We have to see if 4 Hrs chart can print a higher high or not. If there will be a lower high, then the next try will likely be succesful. Anyhow, the ultimate support is ard 317-317,50. If that breaks, the counter trend can start. If I see any further sell signals on 4 Hrs time frame, I will post it for you.
Short
by Kumowizard
1
EURHUF - Bullish or bearish? Major decision point at 307,55From the left side it is still neutral/bearish, but from the right side it is bullish. In fact it is boring, but it will soon be interesting as support/resistance levels are tightenning. Daily: Bearish Ichimoku setup, but if it can not print wave 5 point soon, but instead breaks the small bearish trendline and Kijun Sen, then we'll have bullish breakout from the wedge and Price will attack the Kumo. MACD is bullish with positive divergence, but ADX is very low, which means in short term we can hardly talk about a trend. Once DMI lines start to widen and ADX picks up, we'll see a decent move. 4 Hrs: Everything is simply bullish on this time frame, until Price is above 305,50. The question is if this counter trend can accelerate or will stuck? As you can see on both time frames, the most important upper key level is ard 307,55. If Price breaks and stays above, that would bring a trend continuation on 4 Hrs and a possible bullish reversal on the daily.
by Kumowizard
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