Kumowizard

USDHUF - Looks topish a bit, flag break soon

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Daily: Long term Ichimoku setup is bullish . But it has printed a Hangin Man and a Doji in last two days. It can be either a further bullish flag building, or a confirming signal that the top is building here ard 235-236 for now. Slow Sotch is bearish , MACD gave a sell signal. Today Hungary's GDP was higher than expected. (3,9 % vs 3,5 % exp             .)
Equilibrium price is 229,50-230. USDHUF             may have a pull back down to the trendline or to the equilibrium support level.

4 Hrs: Price got stuck in a tight triangle, and trading in the Kumo (consolidation). Upper break would be above 235,30, lower break below 233,70. Chikou Span is at Price, and ADX dropped below 20, with tight DMI             lines. All these tell us undecision and consolidation.

The flag break can happen in any directions, with almot 50-50 % chance. However given the daily MACD and Slow Stoch , the chance of a dip (correction) maybe a bit higher.

If you don't have any position in USDHUF             , it is not wise to play the upper break and go long, as risk-reard after such a rally is not the best. However for a swing short it can be good below 233,70, with 230-231 tgt             . Also if you have longs still, 233,70 is the level to watch for final take profit.
Recluse82
2 years ago
H&S pattern is complete on H4, waiting for breaking down
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Kumowizard PRO Recluse82
2 years ago
I am not a real fan of candle form patterns, as those give you signals very late. However very useful to provide support and confirmation for a position or idea. Indeed, it is a HS. It's neckline measured tgt is 230. That is also the Key bullish support on Daily chart.
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Recluse82 Kumowizard
2 years ago
exactly, im gonna close my short at 230
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Kumowizard PRO Recluse82
2 years ago
Probably a good idea. I'd place some bids myself even above 230 a bit.
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Kumowizard PRO Recluse82
2 years ago
The major trend is still bearish HUF.
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Recluse82 Kumowizard
2 years ago
i know, i am a hungarian! overall target could be 250-300
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Recluse82
2 years ago
the chart is not looking good :-)
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Kumowizard PRO Recluse82
2 years ago
Nope. It looks really sht. I cut my latest shorts already both in USDHUF and EURHUF. HUF trades like sht. It can not get any smaller strength even in the biggest global risk-on. Actually we shouldn't be surprised on this. There is a Central Bank which thinks Hungary's base rate has to be below Poland's, Australia's, etc., the offer IRS into the mkt during each bond auctions way below mkt rates, they pump the system with liquidity, and so on. Maybe they need to blow a bubble on the real estate mkt... at least their growing real estate portfolio can be valuated higher :-D. Btw if you own HUF, the only reasonable investment in Hungary is now real estate. Still an undervalued mkt.
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Recluse82 Kumowizard
2 years ago
i have only usd and eur, huf is going to collapse i think
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Kumowizard PRO Recluse82
2 years ago
well, depends what you call a collapse. at 330 NBH will do intervention. And as soon as they cut the FX exposure finally in Hungary (no one knows when its gonna happen really), there will be no more risk for HUF. However there will be still some kind of C/A surplus, some growth, so at some point even with rates kept relatively lower, HUF will have the chance to perform better.
But history shows that Hungary's policy makers always fck stg up. I think the problem there will be they forced themselves to stay behind the curve for long time. Not just the mkt, but now NBH is heavily received in rates. The only entity who is paid on the mkt is the National Debt Management Agency, who is naturally always seling bonds :-).
So the policy is clear. They want to devaluate national debt, they want to create some inflation, so they need weaker HUF, but not too weak HUF. As a too weak ccy would cause problems still to foreign ccy denominated debt. For this reason, you'll see that by end of December, they will push EURHUF down. From where to which level I don't know, but at the end of the year HUF will have to gain stregth. Of course until that it can fly even to 330.
Not an easy pair to trade for sure.
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