FxNews –The USDHKD (U.S. dollar vs. Hong Kong Dollar) price in Wednesday’s trading session hovered around 7.82 and tested the median line of the bullish flag. In addition, the technical indicators are promising a downtrend in the daily time frame.
USDHKD Forecast
The RSI indicator is turning downward, and the awesome oscillator bar has turned red. It is worth noting that the currency pair’s price trades below the 61.8% Fibonacci support level, which gives more credit to a bearish scenario.
The USDHKD 4-Hour Technical Analysis
To better understand the USDHKD price action, we are zooming into the 4-hour chart.
The bullish flag also appears in the 4-hour chart. However, the technical indicators are bearish, and the price crossed below the 78.6% Fibonacci support, the 7.82 mark. From a technical standpoint, the USD/HKD pair will likely experience a decline in the lower band of the bullish flag. This support level has the backup from the 61.8% Fibonacci retracement level, the 7.81 mark.
On the flip side, if the price crosses above the 7.8 resistance, the above bearish scenario should be invalidated. In this scenario, the next bullish target could be the upper band of the rising flag.
Hang Seng Falls Amid Concerns Over China’s Market
Bloomberg—The Hang Seng Index dropped 54.98 points, or 0.34%, to close at 16,081.89 on Wednesday. This decline came after an initial rise caused by concerns about the effectiveness of China’s measures in supporting its falling stock market. These measures include a commitment from a government fund to buy more ETFs.
Additionally, investors were more nervous due to the anticipation of China’s Consumer Price Index (CPI) and Producer Price Index (PPI) data for January, which were expected on Thursday. This concern arose from December’s data, which showed ongoing deflationary pressures. In the United States, Federal Reserve officials’ comments supported Chair Powell’s statement on Sunday, indicating the Fed’s reluctance to adjust its monetary policy quickly.
The downturn affected various sectors, with technology, real estate, and consumer sectors leading the losses. Significant drops were seen in companies such as Semiconductor Manufacturing (-8.0%), Lenovo Group (-4.9%), Miniso Group (-4.4%), Xiaomi Corp. (-1.6%), and Meituan (-1.4%). On a positive note, electric vehicle (EV) stocks like BYD Co and Nio saw gains of 2.0% and 1.8%, respectively, following Beijing’s announcement of its plan to foster the “healthy development of new energy vehicles” in China.