Will EUR/HUF hold support as foreign bond inflows support forint strength?

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Euro vs forint slips 0.54% today

Highlights

Hungary's central bank supports forint appreciation to address high services inflation and has attracted $13.5 billion in foreign bond inflows.
The central bank paused rate cuts at 5.5% and lowered its inflation target to 2.5% beginning in 2028.
EUR/HUF remains pressured below key moving averages, with intraday indicators oversold and an expected range of Ft362.464 to Ft366.106 for the next sessions.

Central bank prioritizes forint gains as inflation-fighting strategy

Hungary's central bank has explicitly indicated support for forint appreciation as a strategy to offset high services inflation relative to the euro area, emphasizing that nominal foreign exchange gains are more beneficial for disinflation than harmful to growth, according to Investing.com. This policy approach has been accompanied by a reduction in the central bank's inflation target to 2.5% from 2028 and a resulting $13.5 billion in foreign bond inflows, with Indexbox reporting a 6% appreciation of the forint against the euro this year. Policy developments have also included a pause in rate cuts at 5.5% and a more restrictive inflation stance, pointing to a cautious approach even as discussions continue regarding potential further easing, as outlined by Fxstreet.

Seller dominance intensifies as technical indicators confirm oversold zone

EUR/HUF trades below both the MA-20 and MA-50 on the h1 chart, with the price remaining under the MA-200 on the daily. The Ichimoku Kijun level at Ft365.843 acts as immediate resistance. Technical indicators show that RSI signals a sell, while Stoch RSI, CCI, and Bull/Bear Power all highlight oversold conditions and pronounced seller dominance intraday. MACD and ADX remain neutral, indicating the absence of a clear momentum trend, and the Awesome Oscillator does not provide directional confirmation.

Consolidation expected as upside probabilities lag amid bearish bias

Over the next two to three sessions, EUR/HUF is likely to consolidate within a typical volatility band of Ft362.464 to Ft366.106. Forecast probabilities suggest a 44% chance of upward movement, while the downside scenario remains dominant. The baseline outlook favors sideways price action, but a decisive break above Ft365.843 could trigger bullish momentum, whereas a sustained move below Ft362.464 risks opening another leg lower.

Viktoras Karapetjanc, Senior Analyst at Traders Union, sees Hungary’s central bank policy as a clear sign of support for a stronger forint over the medium term. He believes the mix of tighter inflation targets, firm messaging around FX, and strong foreign inflows will keep downside pressure on EUR/HUF intact. Macro signals and cautious central bank action reinforce structural confidence in HUF despite short-term oversold technicals. "If EUR/HUF remains capped below Ft365.843, the path of least resistance favors a gradual move lower toward Ft362.464 in the coming sessions."

In a recent review, analysts highlighted short- and medium-term bullish momentum for EUR/HUF amid ongoing discussion of Hungary's progress toward euro adoption. The current backdrop, marked by a more restrictive monetary policy and forint appreciation, indicates that traders should closely watch the Ft365.843 resistance for any shift in momentum in the coming sessions.

Source of Data: EUR 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.