The European markets continue to be characterized by choppy price action, with two days of gains often followed by two days of declines, reflecting the prevailing uncertainty among investors. Some sector rotation can be observed away from the previously market-leading technology sector and into other areas of the market. While attractive stock opportunities can still be found, we remain sceptical that a sustained momentum-driven move can develop in the current environment. As a result, strong directional trends appear unlikely for the time being. In such conditions, pullbacks and retests are likely to provide more favourable entry opportunities. This week, we highlight two French stocks from our screen.
Hungarian Equities - Technical Analysis
The BUX index may currently be in a corrective phase following its recent decline, with a retest of the latest swing low appearing more likely. MOL remains in a downtrend and could move lower if it breaks below its most recent swing low. Richter, however, has broken above its downtrend line, suggesting that a new upward wave may have started with the all-time high as a potential target. Magyar Telekom also broke higher two weeks ago, and the uptrend remains intact. Opus is still trading in a downtrend, with no convincing signs of a reversal yet. Rába continued to move within its narrowing range, and under the right conditions, another upward wave could emerge later on.
The dollar has reached key support levels against both the euro and the pound, where some buying interest has already emerged. As a result, the charts are increasingly pointing to the possibility of a corrective rebound. On a broader timeframe, however, there are still no clear signs of a sustained weakening trend in the dollar. Following a period of weak performance, the forint has reached a resistance zone, where buying activity is once again evident against its major currency pairs; thus, a sideways, range-bound movement still appears likely. Although the USD/JPY exchange rate managed to rise, it continues to trade within a downtrend, so a trend reversal is still some time away. For this to happen, it is important that the exchange rate does not hit a new low. Following its rise, the EUR/CHF is undergoing a strong retest, so its long-term uptrend may now depend on key levels.
EURUSD
EURUSD
The exchange rate, in a trend-like decline, has reached a zone that could trigger a correction. Stronger buying interest has emerged around the 1.1230 support level, suggesting that the decline may soon give way to a corrective upswing. The broader technical picture remains negative, suggesting that only a smaller corrective rebound may develop in the near term. The 1.1475 area represents strong resistance; based on the current pattern, a move beyond this level cannot be anticipated. A structural shift is still a long way off; this would require a higher swing low as well as a return to the key milestone level of 1.1719.
The graph did not hit a new low, even as the dollar strengthened, which could be a good sign for opening a long position. The downtrend and the structure would break at the 1.3306 level.
Resistance levels: 1.3672; 1.3916; 1.4160. Support levels: 1.3184; 1.2939; 1.2812.
EURHUF
EURHUF
It may encounter resistance above 367, while it could find support below 359 in the short term. The downtrend is still far away, and the price could remain within this range for quite some time. The zone between 351 and 355 would serve as very strong support, while the 375 level represents strong resistance. The price is likely to move within this range in the coming weeks.
The uptrend reached resistance at 328.1, which stalled it and caused the price to reverse slightly. It could correct above the uptrend line for as long as one or two weeks without breaking the trend. A close below 320.4 could be a bad sign.
Following the strong retest, the descending trendline remains intact, and the broader trend continues to point lower. If a new downward wave fails to establish a fresh swing low, the chances of a reversal could improve over time. The downtrend is currently aligned with the 159.38 level.
Resistance levels: 162.5; 165.63; 168.75. Support levels: 153.13; 151.56; 150.
EURCHF
EURCHF
A structural shift occurred a few weeks ago, but we still saw a strong retest last week. This has not yet broken the last support level at 0.9277. As long as it stays above the thin green trendline, the uptrend may continue.
