Weekly chart
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Subsequently, the pair has been trading lower and formed a descending triangle in force since mid-2015, as apparent on the weekly chart. The given patter has had two confirmations on the upper side and one to the downside. Nevertheless, the exchange rate is still expected to complete the second wave down to the lower triangle boundary and bounce back in order to confirm the validity of the triangle. This pattern is generally bearish, suggesting that a breakout south might be a possible scenario in one year's time. Technical indicators are likewise bearish on this time-frame. For instance, the 55- and 200-week SMAs have formed a death cross, as well as the 100-week SMA approaching the latter may result in another intersection in a few months' time. In addition, the Ichimoku lines are likewise flashing bearish signals, as Tenkan-sen has moved under the longer-period Kijun-sen.
Taking into account the above, it might be expected that the Hong Kong Dollar edges lower in order to provide the second confirmation of the triangle pattern around the fourth quarter of 2017, as demonstrated by the dashed blue line on the chart. In the meantime, the 200-week SMA can prove to be a strong level of support that may hinder the Hong Kong Dollar from moving downwards, thus confining the rate between the 100- and 200-week SMAs for the following trading weeks. Thus, the price may fluctuate slightly in the red Ichimoku cloud prior to trading lower. Furthermore, it can be observed that Gann angles have managed to change the price direction on several occasions. Thus, another reversal may occur near the 13.60 mark, a level that is likewise reinforced by the 23.6% Fibonacci retracement line.
Daily chart
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The daily time-frame allows examining the second wave in more detail. It is apparent that the price has been trading in an ascending broadening wedge pattern in force since mid-December, 2016. Likewise, the rate has followed the median pitchfork line for a couple of months prior to breaking out to the upside with little hindrance and testing the upper boundary of the broadening wedge. By and large, the base scenario suggests that the pair may depreciate until the bottom wedge boundary circa 13.6200 within the upcoming month or two; this level is likely to coincide with the median pitchfork line at that time. During the following weeks, the Hong Kong Dollar should continue appreciating against the Yen and fluctuate briefly around the 20-day SMA at 14.3829 in the red Ichimoku cloud (likewise reinforced by the first pitchfork parallel), prior to fulfilling the above scenario. In contrast, the Hong Kong Dollar may not halt at the 20-day SMA, carrying on with a move towards the upper wedge boundary. Trend indicators, nevertheless, demonstrate slight prevalence of the bearish momentum. In addition, MACD is set to cross the zero line from above, pointing to bearish outlook, as well.
Four-hour chart
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Moving on to the four-hour chart, the Hong Kong Dollar has retraced back from the upper pitchfork trend-line at 14.2326. The current upward momentum suggests that the pair may continue trading higher, testing a resistance cluster formed by the upper Bollinger band, the first pitchfork parallel and the 55-period SMA around 14.38. However, taking into account bearish technical indicators, this motion up may be considered as a short-term correction against the overall downtrend. The following trading week may provide the necessary signals to confirm the bearish predictions or, conversely, demonstrate that the pair may, nevertheless, trade higher, thus approaching the 100-period SMA at 14.3927.