Societe Generale analysts report that the EUR/HUF currency pair has continued its steep decline, extending losses after failing to hold above the 200-day moving average in March and breaking below April’s low [1]. The move is described as 'stretched,' with the daily MACD indicator in deeply negative territory, and no signs of a rebound are currently visible [1]. The next downside targets are identified at 352 and 350, while any short-term recovery could face resistance near the recent pivot high of 368 [1].
The Hungarian forint's strength has driven the euro to fall below 360 against the forint for the first time in four years, following strong economic data from March [1]. Industrial production in Hungary surged by 3.7% year-on-year, defying expectations of a decline, and retail sales increased by 8.2% year-on-year [1]. Inflation also rose to 2.1% in April from 1.8% in March [1].
On the fiscal front, PM-elect Magyar warned that new budget projections imply a 6.8% of GDP deficit for the year, significantly above the official target of 3.9% and a revised goal of 5% [1]. This has prompted calls for fiscal discipline from MNB Governor Varga and Deputy Governor Kurali [1].
The combination of robust economic data and fiscal concerns has contributed to the ongoing pressure on the EUR/HUF pair, with technical analysis suggesting further downside potential unless a rebound materializes [1].
CONCLUSION
The EUR/HUF pair remains under pressure due to strong Hungarian economic data and fiscal concerns, with analysts targeting further declines toward 352/350. Market sentiment is negative, and technical indicators do not yet signal a rebound, suggesting continued forint strength in the near term.