Forex Market: USD/HUF daily trading forecast

Yesterday’s trade saw USD/HUF within the range of 241.67-243.80. The pair closed at 243.11, gaining 0.27% on a daily basis.

At 8:16 GMT today USD/HUF was down 0.56% for the day to trade at 241.71. The pair broke the first key daily support and touched a daily low at 241.50 at 8:19 GMT.

Fundamental view

United States

Manufacturing activity in the United States probably remained almost unchanged in September, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 58.0. In August the final seasonally adjusted PMI stood at 57.9, which has been the sharpest improvement in business conditions since April 2010. Export sales registered the fastest rate of increase in three years, while payrolls rose at the steepest pace since March 2013, according to Markit. Values above the key level of 50.0 indicate optimism (expanding activity). Higher than expected PMI readings would certainly support the US dollar. The preliminary data by Markit Economics is due out at 13:45 GMT.

Hungary

The Monetary Council of the Hungarian National Bank (Magyar Nemzeti Bank) will probably leave the benchmark interest rate unchanged at the record low level of 2.1% at the policy meeting today. The central bank last cut borrowing costs by 0.20% to the current 2.1% at its July 22nd meeting. The benchmark rate is banks base rate on refinancing credit maturing over one year, which the central bank lends to financial institutions.

Short-term interest rates are of utmost importance for the valuation of national currencies. In case Magyar Nemzeti Bank is hawkish about inflationary pressure in the economy and, thus, decides to introduce a rate hike, this will provide support to the forint. Respectively, a decision (maintaining or even cutting the benchmark rate further), a result of a more dovish view, will have a bearish effect on the local currency.

The official decision on policy is expected at 12:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 242.86. In case USD/HUF manages to breach the first resistance level at 244.05, it will probably continue up to test 244.99. In case the second key resistance is broken, the pair will probably attempt to advance to 246.18.

If USD/HUF manages to breach the first key support at 241.92, it will probably continue to slide and test 240.73. With this second key support broken, the movement to the downside will probably continue to 239.79.

The mid-Pivot levels for today are as follows: M1 – 240.26, M2 – 241.33, M3 – 242.39, M4 – 243.46, M5 – 244.52, M6 – 245.59.

In weekly terms, the central pivot point is at 242.50. The three key resistance levels are as follows: R1 – 244.53, R2 – 246.34, R3 – 248.37. The three key support levels are: S1 – 240.69, S2 – 238.66, S3 – 236.85.