Forex: Hong Kong dollar: USD/HKD bouncing within wedge pattern

September 17, 2013 September Tuesday 17th_: The USD/HKD yesterday lost 0.03 percent with the daily candle opening at 7.7541 and closing at 7.7538. The pair traded within the range 7.7535 to 7.7542. The price has been moving within a shallow 11-pip range since 11 September and close to the lower line of a wedge pattern, which has been forming since the 4 July low of 7.7519. The price action has been residing in this consolidation figure after breaking the neckline of a larger double top pattern, which had been forming from April to June.

Breaking the wedge to the downside would send the USD/HKD towards the strong support level of 7.7500. Contrariwise the price would jump towards the 5 April high of 7.7662.
At press time the pair is trading at 7.7539, right at the descending 89-hour simple moving average, which may act as a resistance. Earlier today the price reached a high at 7.7545, but hit the falling 200-hour simple moving average, which offered strong resistance, and then depreciated to an intraday low of 7.7538.

Currently the 89- and 200-period SMAs are floating above the price action on the daily, 4H and 1H charts, indicating bearish sentiment. Also on the same scales the MACD (9,12,1) is negative, indicating that there is downwards pressure.
Earlier today the Unemployment Rate in Hong Kong for August was announced, which remained at the current level of 3.30 percent and matched the forecast. The rate has been decreasing since April, when the value was 3.50 percent. No immediate impact has immediately been apparent on the price action.

The US Consumer Price Index m/m for August showed a 0.1 percent increase, compared to the expected 0.2 percent rise. The Core CPI m/m matched the forecast for a 0.1 percent growth in August, but slowed down after in July the index rose by 0.2 percent. After the release the pair again didn’t respond significantly.

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