EUR/HKD 1H Chart: Channel Down

Starting from mid-March the Euro has been generally underperforming relative to the Hong Kong Dollar. This has led to formation of the bearish channel, meaning a deeper sell-off is a likely scenario. However, the pair is approaching the lower falling trend-line at 10.5759, a touch of which could trigger a correction. If this is the case, EUR/HKD will be expected to rise as high as 10.6893 before starting a new bearish wave. And while the negative outlook is reinforced by the technical indicators, traders seem to be convinced that the single currency is bound to recover, as the distribution between the positions is heavily skewed in favour of the bulls—they take up 71% of the market.