HKD/JPY 4H Chart: Channel Down

The Hong Kong Dollar is depreciating against the Japanese Yen simultaneously in medium-term and short-term descending channels. The junior pattern represents a second rebound of the currency exchange rate from the upper trend-line of the senior formation. It seems that in the early Wednesday morning the pair has already bounced off from a combined support level set up by the 200-period SMA and the weekly S1 at 14.3165. Hence, the question of the day is whether the rate will manage to break through the junior channel‘s upper edge or it will make a rebound and continue to move downwards. Due to the narrowness of this formation, the first scenario seems very possible. However, even if it realizes, the surge most probably will be limited by the 55- and 100-period SMAs with the weekly PP at 13.4863.