The Hungarian forint moved mostly sideways on Tuesday as the EUR/HUF pair remained in a narrowed range. Since the situation over the Polish budget had not been resoled during yesterday trading, the unit lacked sufficient stimuli for strong price action. Technically, EUR/HUF hovered the whole session above the key 249.65 support, which is the 10-weeks low. Given the empty domestic calendar a development on the Polish FX market after a successful budget vote should determine today’s price action. The forint should also look at the domestic bond market for inspiration. Just let us remind the technical picture - should the EUR/HUF break below the 249.65 level, further forint gains are fully possible and EUR/HUF can quickly dip to the 248 zone. EUR/PLN finally breaks out 3.835-3.863 range, as state budget passes through Sejm.
(CSOB - investment research)