EU funds decision limits US dollar to Hungarian forint exchange rate near Ft319.9245 support

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US Dollar vs Hungarian Forint up 0.55% today

Highlights

The European Commission proposes unblocking €4.2 billion in cohesion funds for Hungary, enhancing fiscal flexibility and external balance outlook.
Hungary's central bank keeps its main policy rate at 5.5% and sets a lower 2.5% medium-term inflation target from 2028 for stricter monetary discipline.
USD/HUF is trading near session highs in a bullish configuration, with strong buyer signals and a projected range of Ft320.9486 to Ft324.5218 over the next two days.

Forint demand improves as EU funds resume and MNB tightens outlook

The European Commission has proposed to unblock €4.2 billion in cohesion funds for Hungary, following recent policy steps by the Hungarian government to reinforce the rule of law, according to Bloomberg. The reopening of these funds would enhance Hungary’s fiscal flexibility and external balance, improving background demand for the forint. Meanwhile, the Hungarian central bank (MNB) kept its main policy rate unchanged at 5.5% and reduced its medium-term inflation target to 2.5% starting from 2028, a move that signals a more disciplined monetary stance and supports the currency, as reported by Fxstreet. Additionally, the MNB raised its 2027 inflation outlook and will hold more frequent policy meetings, offering further policy clarity and potential for rapid response to market developments.

Bullish momentum persists as overbought signals challenge trend

USD/HUF trades above the MA-20 at Ft321.1448 and MA-50 at Ft318.6456 (hourly chart), as well as the MA-200 at Ft316.9571 on the daily chart. The long-term MA-200 serves as a key support level below the price, while the Ichimoku Kijun at Ft319.9245 offers nearby support. Momentum indicators are mixed: MACD shows a Strong Buy and ADX signals a Buy, while CCI and Bull/Bear Power are both registering overbought readings, confirming strong buyer presence. RSI is biased toward buying at 64.972, Stochastic RSI is neutral, and the Awesome Oscillator remains neutral. The price sits near the session high with a narrow gap of 0.0158 in a low-volatility setting, suggesting ongoing bullish strength but some risk of mean reversion due to overbought oscillators.

Consolidation likely as breakout risks shape short-term outlook

Over the next one to two trading days, USD/HUF is expected to fluctuate between Ft320.9486 and Ft324.5218, representing a typical volatility band relative to current levels. The probability of an upside move remains very high, with the most likely scenario being price consolidation inside this range. A move above the upper bound would signal a bullish extension, while a drop below the immediate Kijun support would suggest a short-term correction.

Viktoras Karapetjanc, expert at Traders Union, sees fundamental improvements supporting the forint after the European Commission proposed to release €4.2 billion in funds for Hungary. He believes the Hungarian central bank’s disciplined stance and higher policy transparency add stability to the macro outlook. Technical signals confirm bullish sentiment but warn of a potential pause due to overbought readings. The expert expects consolidation with a bias higher unless key supports break. "In my view, Hungary’s funding outlook and monetary policy discipline position the forint for further strength, provided risk appetite holds."

Earlier, analysts noted that foreign demand for Hungarian local bonds was on the rise as investors responded to credible policy steps and the central bank’s reduced inflation target, with expectations focused on fiscal consolidation and euro convergence. The current technical setup in USD/HUF, combined with recent EU fund developments and MNB policy measures, adds further support to the case for a resilient forint, making the Ft319.9245 Kijun level a critical inflection point for traders monitoring short-term reversals or extensions.

Source of Data: USD Price Analysis by TU

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.