EUR/HUF Outlook: Can Falling European Gas Prices Drive EUR/HUF Higher?

European gas prices have an indirect impact on the EUR/HUF, but it’s important to consider. It’s mainly related to inflation, trade balances, and monetary policy expectations.

Lower European gas prices reduce energy costs across the region, thereby easing inflationary pressure in Hungary, which is highly dependent on energy imports.

This way is improving Hungary’s trade balance and lowering the risk of interest rate hikes by the central bank, supporting the Hungarian forint. In turn, the EUR/HUF tends to move lower when gas prices fall and vice versa.

This article examines the economic scenarios that could impact EUR/HUF and the technical outlook for the pair.

The Economic Scenario that Could Influence the EUR/HUF Exchange Rate:

Bank of America (BofA) suggests that the Hungarian forint could appreciate against the euro (EUR) as they expect that European gas prices could decline to half.

These expectations are based on further developments toward ending the ongoing conflict in Ukraine and establishing a gas agreement between Europe and Russia.

According to BofA expectations, if gas prices drop to half, this could cause a 3.75%-7% appreciation in HUF against the EUR. On the other hand, the EUR would strengthen by approximately 5% againd the USD in this scenario. At the same time, emerging market currencies could appreciate approximately 4.5% versus the US Dollar.

This scenario assumes that no new tariffs would be imposed, which seems difficult in Trump’s era. They also note that these results are sensitive to the methodology used.

BofA analysts note that the primary factors influencing the EUR/HUF exchange rate are likely to be broader currency dynamics, such as a stronger EUR against the USD or stronger emerging currencies against the dollar, rather than the direct impact of falling gas prices.

The Technical Outlook for the EUR/HUF:

The EUR/HUF piece action shows that the pair is holding above the key support level near 382.83. This indicates that the selling pressure is slightly eased right now.

Currently, EUR/HUF is trading around 386.28, which represents an important near-term resistance. A sustained breakout and daily close above 386.28 would technically improve upside momentum and strengthen bullish sentiment in the pair. If this breakout is confirmed, EUR/HUF could eye the next key resistance near the 390 level, where sellers previously emerged.

Until a clear break occurs, price action may remain range-bound between support at 382.83 and resistance at 386.28, reflecting a period of consolidation before the next directional move.