HKD/JPY 1D Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Following a 6 percent dip in the value of HKD/JPY after the Brexit vote, the pair returned into the channel down it had been following since October 2015, just to put it to the test it in early September. The currency pair is currently attempting the upper trend-line which it is expected to confirm once again. However, in case of a breakout the pair will bounce from the top line, which would initiate a rally at least towards the 100-day SMA and upper Bollinger Band cluster at 13.4700/4900 and the 200-day SMA at 13.9877 after that. Nevertheless, it is more likely that the pair returns into the channel and continues its way south with near-term resistances located at 13.2390 (55-day SMA) and 13.1166 (20-day SMA). This development is also strengthened by the descending triangle formation the pair has developed over the past three days. Furthermore, 70 percent of positions being long on the particular currency pair show that trader sentiment implies a trend continuation.
© Dukascopy Bank SA
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