This is a no-holds-bared, unmitigated, lock-and-load - and do it now! -, scenario. It does not get any easier than this, not even in the EUR/USD.
The Hungarian Forint is staring at a massacre, with immediate effect. (... despite the fact that I applaud Victor Orban, the Hungarian Prime. Nevertheless, he has nothing left to work with. Simultaneously, he (still) is public enemy #1 for the EU - as member states go -, as well as in the eyes of the Biden administration. Now, the only remaining friendly country to Hungary, in Europe, is the Vatican. Orban courageously fought the good fight, all along, but, at least economically: "It's been nice signing with you Koko but ..." - It's over.) p.s. Everything the western media had been spewing about Orban for the past 12 years lacks a single iota of truth. - Bet on it! The guy won 3 democratic elections with 2/3 majority which, even the communist slime-run EU, was forced to admit. I will forgo the long version here and provide in lead words what matters here;
- Hungary is a tiny economy (10 million people), one of the smallest EU members; (IBordering with Ukraine and taking in the second largest number of Ukrainian refugees - after Poland - while the Kyiv continues to prosecute it's large, Hungarian minority.) - They built the first wall on their southern border, which the EU never paid for - as they remain obligated to do so but likely never will; - Hungary is 72% agricultural, lacking any and all energy (or other, primary) resources. E.g. It is 100% dependent on Russian energy - regardless how it gets there (indirectly from Russia at a major markup, very likely in the near future.) - Hungary categorically refuses to support the EU madness or to go along with US demands to join the fight for the Ukraine; (Orban is no friend of Putin but he is also unwilling to crater Hungary's economy on a US/EU whim.) - The Hungarian National Bank recently spent a significant portion of it's reserves to buy gold. The unfolding USD rally will likely temper any related enthusiasm; - The EU is currently (punitively) the portion of EU funds due to Hungary for fiscal 2023; -The Biden administration recently made it a point to go after Hungary (Orban specifically) "to enhance a regime change". (Wasn't that illegal, at least on paper? ...) - Sunday's State of the Union by Orban is a potential call to arms in the West.
(One could write a book but) Long story short: The combined Western Alliance is about to lean into Hungary which is most unlikely to result in any economic, monetary or any other, miscellaneous national - or monetary - benefits.
Bottom line: There is blood in the water here so, start taking very big bites! - Long!
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A Long entry anywhere here ... ... provides effectively tight Stops. (Hence, my contention to "to load on this one", and to do it here.)
I.e. Only expenses and no EU funds coming into Hungary - for the foreseeable future, if ever. Hardly conducive for a "monetary boom".
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Just how much more of a cozy, superbly padded launching pad could one expect?! ... ... For real.
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Important Most recent Hungarian economic data;
- Inflation - annual rate: 15.48%; - GDP: Q3 & Q4 (2022) was -0.7% and -0.4%, respectively = Recession; - Housing prices - YoY: -20% (While listed but unsold units are up +50%, YoY); - Employment: 0% change
Most importantly, Hungary had the tightest energy and food price caps in Europe, since the beginning of the Ukraine war. (All of Europe shops in Hungary due to the lowest price controls - Gov. price caps - in the EU.) This had negatively impacted 55% of the state budget while, simultaneously, EU funds were frozen. The country is now in Stagflation (1972-73 US style) that is rapidly gaining momentum. The double digit inflation shows no signs of leveling off - let alone subsiding. E.g. While the EU (led by Germany) is in the process of committing Hara Kiri - in a spectacular fashion - Hungary is it's weakest member, leading the way for the rest of the EU. (I.e. Expect a 16% drop in the EUR/USD in the immediate future!) Consequently, while the Euro is also "finished", for all practical purposes (for the long run), Hungary (an EU and NATO member state) is the practical example what to expect continent-wide, as of right now! (That is what's meant by: "blood in the water".)
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Chances are ...
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This is likely to double-tap the indicated support area before take off! In any case, this ought to happen rather swiftly (pin par?) then, off to the races - Long.
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Good Long Entry here
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Continue to be very Looong!!
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Buy it up! Long
Trade closed: target reached
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FLAT - for now. This is only the first (of many!!) leg up! (However, this one made the year, already. :-)
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Loading,loading, loading ... Something fierce! LONG
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BOOM!! - Right on schedule. :-) Get ready to pare back on those Longs, for now.
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An absolutely massive LONG!!
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Here is the Entry Point - LONG;
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The EUR/HUF ... ... has finally arrived onto it's massive support - for a second time - for the retest. LONG!
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LONG
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One would want to be careful here because of this; It is quite possible that at the current, rampant 21.4% inflation rate the MNB (Hungarian Central Bank) could come out with a "surprise" rate hike, in which case this could spike down - Chart - to that major Stop Hunt, just below current levels. There is massive support in the 325-328 area which will undoubtedly hold but it is also too close for comfort where major players (like the MNB) wont gun for it! It's a wait-and-see at least for the balance of this week.
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If, for some reason, one isn't Long, yet ... ... this would be a place to establish some Longs - or to add to existing Longs -, with narrow stops and a favorable R/R Ratio!
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An excellent spot to ... ... get LONG (if one isn't yet) or to add to the position, all with narrow stops here. (No need to risk much as this is a 1:12.5 R/R, here. Keep that ratio going at least until >252.50, even if this is just an addition to existing Longs)
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Comment in the chart; The EU continues to (illegally) withhold development funds fro Hungary - continuously moving the goal post. At this point (9 months into it) chances for the release of those funds are 50:50, no different as they were all along.
Note: A correction to the chart/comment above; Where it says Keep that ratio going at least until >252.50 ..." that reference number is clearly [u]352.50[/u] (Not 252.50)
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This chart/pattern (EURHUF) ... is also supportive of an upcoming Forint (HUF) weakness.
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One wants to take this trade; LONG - This is a 1:12 R/R with correct, minimal stops!
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Definitely a massive LONG here! Nowadays; "Poland gets it for a prize what Hungary gets as a punishment." Both are well despised by the European Union, except now Poland cares precious little with all the shiny new Dollars keep rolling in, as America's newest and best friend - and ally in the Ukraine war. (While the EU continues to withhold development funds from Hungary.)
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Massive LONG!! (1:24 R/R)
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This is one of the most promising ... ... NAFTA vs. EU ("periphery", if you like) pairs, I've been watching for quite some time. LONG The days of "just load up and collect the carry!" are coming to a rapid close. Central European central banks have already started to cut back (100 basis points at a time!) on their stellar rates, brought into effect to combat the similarly stellar inflationary pressures. It is a close call to favor this one over the USDHUF (both very LONG) but if you held a gun to my head I would have to go with this one, the CADHUF. Buy it up - LONG
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Here is the closeup on the CADHUF ... ... for a LONG Entry. These pairs are rather volatile at this point due to the tendency of the Central European central banks to cut their rates by 100 basis points at a time - often twice in a month! Nevertheless, Buying this pair off of the 258 level is as close to optimum as it gets under the circumstances.
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If this pair closes anywhere in that (yellow) box within the next hour ... ... it is very likely to go on a massive tear! - LONG
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Fully loaded here ... LONG, especially versus the CAD; As in CADHUF (massive) LONG.
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There is a really good chance here ... ... for a long term Double Bottom! - LONG
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This is now also a massive LONG!!
Here is the 4 hr.;
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Continue LONG and lean into it! (Add to Longs off of either Stop Hunt and move Stops up to 0.17% of the position thus, locking in even-money) E.g., This should be a "free ride" from here (if you were Long from the original entry) including up to tripling the original position here!
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Boom!! ... and now, just move those stops under those Longs inline with the channel width, which is 0.74%. Easy-peasy.
Trade closed: target reached
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FLAT, for now.
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This move is far from over! Considering that recent numbers point industrial production down 7% and retail sales down -12.5% while inflation is still running at an eye-watering 20% ... ... the future of the HUF (Forint) looks precarious, to say the least. It will not be shocking to see a quick rise above the 400 HUF / 1 USD level (+20%). E.g. we'll keep loading LONG in here for the foreseeable future, especially considering that >$13 Billion stuck short in here that will continue to be squeezed until it can be squeezed no more. ("Bulls make money, bears make money, pigs get slaughtered!")
yes the abcd does say it should go lower before up but read post as its has to do the state of the country
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@ctutun79, It has to do with currency weakness and already sky-high rates having to come down, somewhat.
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almost temped to throw 20k into
ctutun79
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thank you SIR nemo USDHUF is the gift that doesn't stop giving make average 1k a day on this
ctutun79
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I placed 50.lot trade on demo on 28thjun it's now 30k in profit however the swap fee is 18k so really it's 50k in profit.. I plan to listen to Sir Nemo_Confidat on this and go all in redrawing on the home loan 50k as I also researched little on country and everything he writes is true this best long of the year..
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@ctutun79, It all depends on the FX dealer and most will surely skin you alive with those ridiculous spreads. (I do a lot of forward swaps, 30-days out, to avoid paying those "fees", some even traded on the BUX but I believe all those are $1 million minimum, although not sure - You'll have to check.) I think it all comes down to the dealer and you'll just have to find the best deal out there. - And it's important because all those Central & Eastern European currencies are just kicking into high gear, even more than so far!! I'll ask around, too and let you know if I come up with something useful. (But don't just count on it, yet because I had the same question many times before and when I tried, I came up empty, But things may have changed since? ...)