GBP/HUF slides as Orbán government secret Ft500 billion fund allocation weighs

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Pound Sterling falls 1.37% to Ft421.92

Highlights

The Hungarian government secretly allocated at least HUF 500 billion in public funds before the April election, raising questions about fiscal transparency.
Covert spending has increased uncertainty regarding budget discipline and may contribute to a risk premium on Hungarian assets.
GBP/HUF continues to trade below key moving averages, with bearish momentum and a probable range of Ft419.81 to Ft426.05.

Forint sentiment weakens amid covert Hungarian fiscal moves

According to Dailynewshungary, the Orbán government in Hungary secretly allocated at least HUF 500 billion (EUR 1.36 billion) in public funds in the months leading up to the April election. This covert fiscal activity raises concerns over budget discipline and increases policy uncertainty, potentially leading to a risk premium on Hungarian assets. As a result, sentiment towards the Forint remains fragile in the wake of these disclosures.

Bearish momentum prevails as technical resistance and mixed indicators align

GBP/HUF remains below the MA-20 at Ft427.38, the MA-50 at Ft428.55, and the MA-200 at Ft426.82, establishing these levels as short-, medium-, and long-term resistance, respectively. The Ichimoku Kijun is situated just overhead at Ft427.31, marking a point of potential price rejection. Momentum readings show a bearish MACD and a neutral ADX. RSI is at 37.07 and suggests further sell pressure, while the CCI has moved into oversold territory. Stoch RSI appears to indicate possible short-term buying interest, but Bull/Bear Power and the Awesome Oscillator both align with ongoing downside. Divergence among oscillators highlights the prevailing dominance of sellers, though hints of a near-term rebound cannot be ruled out.

Directional clarity hinges on breakout from current consolidation range

In the short term, GBP/HUF is likely to fluctuate within the Ft419.81 to Ft426.05 range. There is a 23% probability of an upward price move, while a drop below Ft419.81 would signal renewed weakness. The base case scenario is consolidation near current levels, with any rebound facing immediate resistance at Ft427.31. A decisive break either above resistance or below support will define the next directional move.

Anton Kharitonov, expert at Traders Union, sees continued downside pressure on GBP/HUF given weak technicals and renewed fiscal concerns in Hungary. He notes that the secret allocation of public funds erodes investor confidence, keeping risk premium elevated. Technical readings remain overwhelmingly bearish, and any upside is likely capped by resistance at Ft427.31. "Base case is for range-bound consolidation, but a break below Ft419.81 could trigger another leg lower," Kharitonov says.

Earlier, analysts noted that GBP/HUF had shifted into a more bearish stance as technical factors pointed to increasing downside pressure. The latest developments underscore continued vulnerability for the pair, and traders should closely monitor the Ft419.81 support level for signs of further deterioration or a potential pivot.

Source of Data: GBP Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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