Forex Market: USD/HUF daily forecast

During yesterday’s trading session USD/HUF traded within the range of 231.75-233.33 and closed at 232.51, gaining 0.28% on a daily basis.

At 7:59 GMT today USD/HUF was up 0.25% for the day to trade at 232.92. The pair breached all three key weekly resistances and touched a daily high at 233.21 at 7:50 GMT.

Fundamental view

United States

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on July 26th, probably increased to 300 000 from 284 000 in the prior week. The latter has been the lowest number of claims since February 2006. The average number of claims during the past four weeks, an indicator considered as lacking seasonal effects, fell by 7 250 to reach 302 000, or the lowest level since May 2007.

This is a short-term indicator, reflecting lay-offs in the country. In case the number of initial jobless claims increased more than projected, this would have a bearish effect on the greenback. The Department of Labor is to release the weekly report at 12:30 GMT.

The Chicago Purchasing Managers Index (PMI) probably improved in July, reaching a reading of 63.0. In June the PMI came in at 62.6. The index reflects business conditions in regions manufacturing sector and is interrelated with the Manufacturing Index, published by the Institute for Supply Management (ISM). A reading above the key level of 50.0 is indicative of expansion in manufacturing activity. In case the PMI exceeded forecasts, this would heighten the appeal of the US dollar. The MNI Deutche Börse Group will release the official reading of the Chicago barometer at 13:45 GMT.

Employment Cost Index (ECI) in the United States probably rose 0.5% during the second quarter of the year compared to Q1, following another 0.3% gain in Q1 compared to Q4 2013. This index measures the change in the price of labor, defined as compensation per employee hour worked. It shows changes in the cost of compensation not only for wages and salaries, but also for an extensive list of benefits. The ECI is considered as an indicator, reflecting cost pressures within companies that could trigger price inflation for finished goods and services. A larger than expected rate of increase would generally provide certain support to the national currency.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 232.53. In case USD/HUF manages to breach the first resistance level at 233.31, it will probably continue up to test 234.11. In case the second key resistance is broken, the pair will probably attempt to advance to 234.89.

If USD/HUF manages to breach the first key support at 231.73, it will probably continue to slide and test 230.95. With this second key support broken, the movement to the downside will probably continue to 230.15.

The mid-Pivot levels for today are as follows: M1 – 230.55, M2 – 231.34, M3 – 232.13, M4 – 232.92, M5 – 233.71, M6 – 234.50.

In weekly terms, the central pivot point is at 229.13. The three key resistance levels are as follows: R1 – 230.55, R2 – 231.32, R3 – 232.74. The three key support levels are: S1 – 228.36, S2 – 226.94, S3 – 226.17.