After a hot fall, a spring tornado could wreak havoc in France
Barely half a year after this year’s French budget was passed, the wrangling over the 2027 budget is about to begin, but that’s not all, because France will also hold a presidential election next spring. During the first public presidential debate, some of the radical candidates put forward ideas that were, at times, unconventional. Although the presidential election in late April still seems far off, based on the latest polls, if no candidate secures enough votes and a runoff is held, it cannot be ruled out that two radical presidential candidates will face off against each other. Market participants may have begun to price in this growing uncertainty, as the yield spread between French and German 10-year government bonds has started to widen again in recent weeks. The period ahead promises to be full of twists and turns, so it will be worth keeping a close eye on developments in French domestic politics.
Commodities - Technical Analysis
Gold and silver prices have retested their uptrend lines, so the long-term trend may continue. Oil prices have broken out of a contracting pattern, which may signal the start of another upward wave. Natural gas prices have also begun to rise, signaling a buy. In the case of copper, the main uptrend remains in effect, and there are currently no signs indicating a change in the trend’s structure. Following significant gains, wheat and corn have become heavily overbought, increasing the likelihood of a correction.
The dollar’s overall trend continues to point toward a weakening, but this picture must be reinforced by further depreciation in the coming days; otherwise, a reversal could easily occur. The forint has reached its target price against the euro, so sideways movement is likely in the short term; against the dollar, the downward trend may persist if the dollar begins to weaken again. In the case of the USD/JPY currency pair, the resistance level at 159.38 has been confirmed, which raises the risk of a break in the longer-term uptrend. Meanwhile, signs of a slow, gradual upward turn may be emerging in the EUR/CHF exchange rate.
EURUSD
EURUSD
Trading continued along the main uptrend line. The curve is under pressure because it must either break below the natural support level at 1.1719 or move above 1.1781 in line with the trend—possibly as early as today—to maintain the trend. If it breaks below 1.1719, the path toward the 1.1597 level could open up. Above 1.1781, the target price could be around the previous high. The thick green trend line is therefore an important support level and could also serve as a risk management level.
Despite yesterday’s bearish candle, the uptrend is not yet in jeopardy. The 1.3428 level could serve as a dividing line between the long and short sides. The thick green trendline could also serve as a risk management level as it rises. The short-term target remains around 1.3672, but due to the higher low, the February high could also be in play.
The calculated value was reached by testing the 355 level. This makes trading on a further strengthening of the forint riskier relative to the potential return. A minor correction may occur, but the curve is likely to remain below 375. Until a structural shift occurs, there is no point in expecting a trend reversal.
Resistance levels: 375; 382,8; 390,6. Support levels: 355.5; 351.5.
USDHUF
USDHUF
After hitting a new low, it has remained in a downtrend. There is still room for further declines, but of course this would require the dollar to weaken as well. The trend-confirming pattern could even push the price down to around 281. Until a structural shift occurs, going long does not seem like a good idea.
The main trend is upward, as indicated by the thin green trendline. Yen buying above the 159.38 level creates a strong barrier and reinforces the zone above it as resistance. The exchange rate has stuck to the level around 156.25, so the 153.13 level also appears to be a potential retest.
Unless the slight downward trend breaks to a new low, it appears to be shifting toward an upward pattern. However, if it breaks above the 0.9277 level, a move toward the 0.94 area would be expected. The longer-term structure has not yet changed, so the upside potential remains limited; however, a higher low could signal a significant shift later on.
Resistance levels: 0.9399; 0.9521; 0.9644. Support levels: 0.9155; 0.9033; 0.8911.
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