Kumowizard
Long

EURHUF - what's left to hit? Close short, go long until you can!

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Seriously I don't understand what the hell can be so attractive in the Goulash currency. Nothing has changed and I think nothing will change in economy policy there after the elections. I talked to some of my friends who work as fx spot traders or rate traders in bank treasuries, asked them what do they see or hear from major customers, what are the idea behind HUF             strength. Most of the answers were funny, but what I liked the most was: "this is a re-newed carry trade, on the back of emerging and periferia bond spread compression idea". OMG! What the hell is the carry here? Adjusted with the basis, etc, it is maximum 1,8 % if you look at the front end rates. What's even better is that as I heard and checked myself too, Hungary's USD denominated 2023             maturity bond is trading only 35 basis points below the same maturity HUF             denominated issue. (USD at 5 % yield vs HUF             bond at 5,35 %). I discussed it with a very good friend of mine, who I respect a lot and who I think is one of the best professional experts, and he called my attention to one more thing: besides this compressed spread, USDHUF             trades at same level as e.g. 16 years ago! So tell me now, where is the carry here??? Is 35 bps             enough risk premium to hold a 10 year local             ccy bond there?

Sorry for being too long and too much fundamental, but this points to one thing again: greed rules everywhere now, investors, global realmoney and hedge fund managers lost their mind. Eveybody underestimates risks eveywhere, markets have become ignorant all around. Everybody is just chasing performance, yields, while they should realise by now, that at current pricing levels nothing is really attractive compared to risks (neither stocks, nor EU periferia or emerging bonds, etc). Actually there is no real alternative cost by now, and that means one thing: cash is king.

And now back to technicals:

Seems EURHUF             has built a kind of base between 304-305,5.

Daily: price got blocked slightly below the Kumo at this horizontal key support. Slow Stoch (which is still,very reliable indicator on EURHUF             ) is about to give a buy signal.

4 Hrs: a trend break is very close, price can easily make a Kijun Sen cross, which will be likely followed by a weak bullish Tenkan/Kijun cross too. DMI             also supports a correctiive bullish reversal.

I really doubt HUF             could be resistent further to risk off sentiment. And I also have a feeling that yesterdays reluctant price action suggests everybody is loaded with HUF             , so mkt positionning is short EURHUF             and short USDHUF             now.

I already bought some yesterday, and I think I will add to longs now. First target is 310.
Momentum seems to be lost a bit. I closed my longs. If you like to keep yours, then move your stops to 306,50 - 306,80.
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Yesterday Price reached the downtrend line on 4 Hrs chart slightly above 309. I closed 1/3 of position there as had TP orders on three different levels: 309,25 / 310,35 / 312,75.
The setup is still bullish on 4 Hrs time frame, with some pull back chance to 307 level. There I will buy that 1/3 position size back again. On the daily time frame price is trading in the thick Kumo. Real problem for HUF starts when it breaks out on the topside, above 312.

Move your initial stops upto 305,75 for the whole long position.
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one more thing: March CPI is out. 0,1 % again YoY, Core CPI down to 2,7 %. What will NBH do?
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