HKD/JPY 4H Chart: Channel Down

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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.