Forex Trends: Euro Making Gains Against HUF
This pair has been on a tight horizontal consolidation since the beginning of the year and a follow through of what has been the situation since June last year. After the Brexit event, there was that promising bullish candle that threatened to break above the upper resistance line and projected to close somewhere around the 327 mark. Since there is increased volatility present in the forex markets, it is preferable to trade with an efficient trading platform like MT4 as it is freely available at easyMarkets.
This hasn’t been the case though especially after price retracted and closed within the trading channel the following week forming a Doji below last year’s high. Price reversal was then confirmed by last week bearish engulfing candlestick and it somehow dashed all hopes of Euro trending higher.
Forex Weekly Chart Analysis: Euro vs. Hungarian Forint
For forex traders, it is critical to note that price action might even trend lower towards the 300 level if anything is to do by the latest proposals for further easing to prevent deflation. There is also the issue of proposed bank bailouts in Italy and Spain which has received widespread criticism from Germany and Brussels.
Technically speaking, forex markets look as though they expect prices to trend lower because the stochastics is turning off from the overbought territory and with that morning start reversal formation, this will likely happen. The number of open short position is also increasing if we look at the slope formed by the OBV after Brexit.
If the MPC elects to cut interest rates at its next meeting, then traders are likely to expect the price to trend higher. Our ultimate prediction is for the price to trend lower and some reaction in the support at 300 is likely before price rallies down towards the 295 level which is last year’s low.