The markets have become quite stretched in recent days, so the likelihood of a more significant correction has been growing. This is well reflected by the low number of momentum-based entry signals; moreover, the quality of these signals is not particularly favorable. One potential reversal signal came from the German company Nemetschek, which develops software solutions for the digitization of the construction industry, architecture, engineering design, and real estate management. After a prolonged downtrend, the stock began to rise and formed a trend reversal on the chart—that is, the previous downtrend was replaced by an uptrend. Nevertheless, in terms of buying opportunities, potential retests and oversold conditions may still offer more favorable entry points.
Hungarian Equities - Technical Analysis
The index stalled near the 150,000-point level, but so far there has not been a strong sell-off that would signal the start of a significant correction. The pattern that is taking shape may already be ready for a reversal, so it may soon become justified to look for short positions. MOL rose steadily to reach the 5,000 forint level, where the first signs of a correction have already appeared. The next significant support level is only around 4,375 forints. Richter climbed back to its previous high and stalled there, but has not yet turned downward. However, the chart is already showing signs of a potential correction. In the case of Magyar Telekom, profit-taking pushed the share price back down to the 2,500 forint level, which has so far proven to be a strong support level. Opus continues to move within a downtrend, and there are no clear signs of a reversal yet. Strong support is visible near the 281 forint level. Following a sharp rise, Rába is currently in a consolidation phase. It is worth looking for opportunities to enter long positions after a deeper retest, particularly in the range below 3,125 forints.
A few weeks ago, the dollar pulled back from key levels against both the euro and the pound. Exchange rates fell as the dollar strengthened, but it is more likely that we will see a higher low. The forint has begun to weaken, though it may still have some room to rise against its major counterparts. The USDJPY exchange rate continued to correct higher following a strong intervention, but the nature of this move does not suggest new highs. A strong day of yen buying could even lead to a short position in this pair. The EURCHF exchange rate, on the other hand, may be undergoing a structural shift, so looking for long positions could be a good strategy in the coming weeks.
EURUSD
EURUSD
The dollar has regained strength in recent days and is already threatening the uptrend. A close below 1.1593 could open up further downside potential. 1.1475 could serve as a support level that must hold if traders are to look for long positions again later. The natural level at 1.1719 is an important resistance; a break above it would open the door to further upside. In that case, even this year’s high around 1.2085 could come into play. For now, it’s worth waiting for a higher low to form.
The strengthening of the dollar threatens the upward trend here as well. A break below 1.3550 could push the exchange rate down to the 1.3428 level. Above that, resistance lies at the 1.3672 level; a break above this could open up further upside potential, but for now, the likely goal is to form a higher low.
Given the sharp reversal from the 359.4 level and the new swing high reached over the past few weeks, the price could even reach the 375 level. On the downside, the 359.4 level should not be breached; this could be the dividing line between the long and short sides.
Three days ago, the exchange rate broke through the downtrend line, thereby changing the downward pattern; the curve is now beginning to rise. The 312.5 level may now serve as support, and the 328.1 area may also be within reach.
Since the intervention seen in the final days of July, only a correction of the decline has been observed. If it fails to reach a new high and a strong bearish candle reappears below 162.5, that could be enough to trigger short positions. Strong support lies around the 150 level; a significant decline is unlikely until it breaks through the thin green trendline.
The rapid return above the downtrend line indicates that a structural shift may be on the horizon. The next minor pullback should not close below 0.9338, as this support level could serve as the dividing line between long and short positions. There could be more upside potential, so looking for long positions may be the better choice as long as the price remains above the aforementioned level. 0.9521 is an important resistance level—it may still be reached—but in the event of a sustained upward trend, the long-term target price could be around the key natural level of 0.9766.
