Orbán faces a difficult election against Magyar putting pressureEuro vs Hungarian ForintACTIVTRADES:EURHUFActivTradesOrbán faces a difficult election against Magyar putting pressure on EUR/HUF By Ion Jauregui – Analyst at ActivTrades Hungary will hold general elections on April 12 that could mark a turning point not only politically, but also in market perception of the country. The confrontation between Prime Minister Viktor Orbán and the opposition led by Péter Magyar takes place in a context of economic weakness, persistent inflation, and high sensitivity to energy prices. The macroeconomic background was already showing fragilities before the recent increase in global geopolitical tensions. Hungary maintains a strong dependence on energy imports, which has intensified pressures on its external balance and its currency. This is compounded by moderate growth and strained public finances, factors that have led the central bank to adopt a more restrictive tone while the market closely monitors the evolution of the Hungarian forint. Market scenarios In this context, investors are focusing on three possible outcomes. A clear opposition victory could be interpreted as a positive signal, opening the door to improved relations with the European Union and facilitating access to EU funds. This scenario could favor an initial appreciation of the Hungarian forint and a reduction in the risk premium. On the contrary, Orbán’s continuation would point to a scenario of political stability, but with persistent tensions with Brussels and no structural changes in the economic model. In this case, the market reaction could be muted, with the Hungarian forint conditioned by still fragile fundamentals. Finally, the most adverse scenario would be a close or disputed result, leading to institutional uncertainty or prolonged legal processes. This scenario could translate into significant volatility in both the currency and the country’s financial assets. EUR/HUF technical analysis From a technical perspective, since January last year the Hungarian forint has shown an appreciation against the euro, reaching a low this year at 373.064, from which it has stabilised its behaviour with a recent rebound in the same area, confirming a consolidation phase within a range between 373 and 391 forints per euro. This level acts as a key reference for the market in the short term. The previous control zone is located around 402.765 forints, a level tested at the beginning of March without success. Recent price action reflects investor caution ahead of the election outcome. A breakout above the range could open an extension towards 400, implying weakness in the Hungarian forint. Conversely, a sustained break below the yearly low could signal an improvement in country risk perception and a strengthening of the Hungarian forint. Currently, RSI is in oversold territory, while MACD maintains a bearish bias, although with recent signs of stabilisation. The 50-, 100-, and 200-period moving averages confirm a still weak structure, with price below the main averages. Political impact on the currency A victory for Péter Magyar could generate an initial positive market reaction, as it would be interpreted as a possible shift towards normalisation of relations with the European Union and the unlocking of EU funds. This would be a “market-friendly” scenario, although the move could be limited if not accompanied by structural measures. In this case, EUR/HUF could move towards the 380 area, with a potential equilibrium around 385 forints per euro. On the contrary, a victory for Viktor Orbán would imply political continuity. Although this would remove immediate uncertainty, the market could interpret the result as neutral in the short term and slightly negative in the medium term due to persistent tensions with the EU. In this scenario, the Hungarian forint could show initial stability but then resume gradual depreciation. The equilibrium zone remains around 385, with 395 as a level of accelerated HUF depreciation, while 375–380 would only be achievable under a clear improvement with Brussels or central bank support. In a scenario of a technical tie or political deadlock, the initial reaction would be an increase in uncertainty, which would push EUR/HUF towards the 390–395 area due to higher volatility and political risk. This would be the least favourable scenario, as markets penalise lack of visibility more than direction. In a later stabilisation phase, the exchange rate would tend to normalise around 385–390, although with risk of extension towards 390–400 if institutional uncertainty persists. The market is therefore in a phase highly dependent on the political catalyst. Beyond the election result, the evolution of the Hungarian forint will be conditioned by relations with the European Union, fiscal policy, and the inflation path, key factors in determining the medium-term stability of the asset. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.