EUR/HUF: Downtrend could extend towards 362 on failure to defend 367 – SocGen

EUR/HUF is bottoming out around 370. Economists at Société Générale analyze the pair’s technical outlook.

A short-term bounce can’t be ruled out

EUR/HUF confirmed a Head and Shoulders earlier this year and evolved within a steady downtrend. That move has stalled after it achieved an intermittent low near 367 in June. 

Daily MACD has been posting positive divergence and has recently crossed above equilibrium line denoting receding downward momentum. 

A short-term bounce can’t be ruled out towards last week's high of 382 and the 200-DMA near 387/389; this is a crucial resistance zone.

In case the pair fails to defend 367, the downtrend could extend towards target for the pattern near 362.

See – EUR/HUF: Hawkish NBH tone should be a boost for the Forint – ING