Hungarian Forint: Holding firm against Euro below key resistance - Societe Generale

Societe Generale strategists expect Hungary's central bank, Magyar Nemzeti Bank (MNB), to cut rates by 25 bp to 5.50% today, with dovish July minutes and softer-than-expected inflation leaving room for further easing. EUR/HUF has pulled back to around 362 after failing near 368, while 359/358 remains the first key support zone. A hawkish surprise could drive the pair back toward 360, whereas a break above the 200-day moving average near 371 would be needed to revive the broader rebound.

Rebound constrained by resistance band

"In CEE, the MNB is widely expected to deliver its fourth 25bp rate cut of the year today, taking the base rate to 5.50%. Dovish minutes of the July meeting and below forecast July CPI of 1.2% yoy paves the way for at least two more cuts as pointed out by Governor Varga in June."

"Our EM colleagues project inflation at 1.5% in 2026 and 2.4% in 2027 and policy easing to 5.00% by end-2026 and 4.00% by end-2027."

"The dovish set up means that any hawkish pushback could see EUR/HUF gravitate back toward 360 (100dma). "

"EUR/HUF has staged a steady rebound after carving out an interim low around 348 in June. The pair has encountered strong resistance near the late-April high of 368. It appears to be forming a base however clear signals of a large upside are not yet visible."

"The 200-DMA, around 371, could act as a short-term resistance; a break above this hurdle is needed to signal an extended rebound. The recent pivot low at 359/358 is first support. A break below this could trigger resumption in the broader downtrend."