Euro vs Forint trades steady after Hungary gains access to significant EU aid

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Euro vs Forint drops 0.50% today

Highlights

Hungary unlocked €10 billion in EU recovery funds, boosting short-term fiscal liquidity but immediate economic deployment remains undecided.
Uncertainty about fund allocation before December adds caution to EUR/HUF sentiment, constraining pronounced directional moves.
EUR/HUF trades under key moving averages with strong bearish momentum; near-term range expected between Ft352.523 and Ft356.065, downside scenario favored.

Forint flows in focus as EU funds boost liquidity but delay allocation

Hungary recently secured access to €10 billion from the European Union's pandemic recovery fund, but Budapest is still seeking suitable projects to allocate these funds before the December deadline. This development increases near-term fiscal liquidity potential for Hungary, which could influence forint supply dynamics and affect EUR/HUF flows, depending on how swiftly and effectively the funds are deployed. The unallocated status introduces uncertainty regarding the immediate economic impact, contributing to a cautious tone in the Euro vs Forint market.

Bearish momentum as euro capped below technical resistance

On the technical side, EUR/HUF is trading below the MA-20 (Ft355.626) and MA-50 (Ft355.347) on the hourly chart, with the MA-200 on the daily timeframe well above at Ft378.547. The Ichimoku Kijun at Ft355.287 marks immediate resistance, while intraday price action remains capped. Momentum signals are firmly bearish, with the MACD and Awesome Oscillator both signaling Sell, ADX neutral, and the RSI at 34.603 indicating weak momentum. Additional indicators such as Stoch RSI, CCI, and BBP all point to oversold conditions, with minimal volatility observed and no meaningful divergence among oscillators.

Downside risk prevails as range-bound trading dominates outlook

In the short term, EUR/HUF is expected to remain within a range of Ft352.523 to Ft356.065, representing a typical volatility band relative to current levels. The probability of further downside stands at 77%, while the likelihood of a reversal higher is comparatively low at 23%. The base case sees consolidation between immediate support and resistance; a bullish scenario would require a clear break above Ft355.287, while a bearish scenario would be confirmed on a move below Ft352.523.

Anton Kharitonov, analyst at Traders Union, sees EUR/HUF trading with clear bearish bias below key moving averages, as technical momentum remains decisively negative. He notes that unallocated EU pandemic funds create fiscal uncertainty, limiting positive conviction and contributing to defensive sentiment in the forint. The base case is for continued consolidation unless Ft352.523 is broken to the downside. "I remain cautious on EUR/HUF — until local support levels are decisively lost or EU fund allocation becomes clear, upside potential looks limited."

Earlier, analysts noted that EUR/HUF remained under sustained bearish pressure, with sellers firmly directing the market’s trend. The current combination of oversold technical conditions and Hungary’s unresolved fiscal deployment heightens the importance of monitoring for any shift in volatility or momentum should clarity on fund allocation emerge.

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.