4 Hrs: We may see a triangle break soon. Based on the indicators, the probability of a break on top side is higher.
DMI with increasing , Tenkan/Kijun medium buy signal within Kumo, Price trading in Kumo but if it breaks above, that will mean a trend break same time.
Strategy: Entry: 307 Limit Buy / 308,25 Stop Buy OCO .
Initial stop at 306.
Upper resistances are at 310 and 312.
p.s.: USDHUF is almost same pattern. The question is what you believe EURUSD would do as next move.
One thing is interesting in Hungary on the bond mkt. The international holding of both HUF and foreign ccy denominated bonds are very high, that is true. But it is concentrated mostly in one particular investment fund's hand. That means the average (rest of) international investors have been underweight in Hungary. Question is what happens if this one fund once ever decides to decrease its huge overweight position in Hungary? I don't say they sell their portfolio (that would be technically impossible anyway looking at how illiquid HGB mkt is), but let's say would not re-invest their maturing bonds. Well, there is still one solution... NBH could buy that :-D.
Ah, and don't forget, Hungary will still have a substantial funding need, as its debt to GDP is not sinking (rather increasing from time to time). Certanly they have funding capacity, they can still channel local households' savings into tbill and bond market. Actually this is what they have just announced. They want bigger local participation in funding, and less external exposure. My view is this also means a slow decrease on the duration of outstanding debt. Long term this can carry further refinancing risks. First the curve will steepen up further, but later, espec if once they see some pickup in inflation, front end will blow up and bond mkt will see a huge bearish flattenning.
Anyway, I just wanna say that besides all the fundamental factors, comparisons, etc., these funding
p.s.: recent volatility is quite low compared to previous months. I think it is managed a bit from the topside ;-). But time works for Bulls.