FxNews—The U.S. dollar is in a bear market compared to the Hong Kong dollar. The bears have dominated the market since April 11 from the $7.83 mark. As of writing, the USD/HKD currency pair trades at about $7.804, closing the gap to the 61.8% Fibonacci at $7.806.
The USD/HKD daily chart below shows that the price has bounced from 78.6% Fibonacci at about $7.797. This development in the price led the technical indicators to show weak bullish signals.
USD/HKD Technical Analysis Daily Chart
The RSI (14) value is 36, exiting the oversold territory. Concurrently, the stochastic oscillator remains below the 20 line, recording 18.0 in the %K line. The awesome oscillator bars are tall, red, and below the signal line, depicting -0.019 in the histogram, which interprets that the bear market prevails.
These developments in the technical indicators and the fact that the U.S. Dollar bounced from the $7.797 resistance signal that despite the bearish sentiment, the American currency is determined to erase some of its losses against the Hong Kong Dollar.
USD/HKD Technical Analysis 4-Hour Chart
We zoom into the USD/HKD 4-hour chart to conduct a detailed analysis and find key levels and trading opportunities. The chart above shows the price below the Ichimoku Cloud, EMA 50, and the descending trendline, a sign of a robust downtrend.
However, the awesome oscillator signals divergence in its histogram, interpreted as a consolidation phase, might be on the horizon. Concurrently, the RSI and stochastic oscillator demonstrate bullish momentum. The RSI record shows 53, and the Stochastic records show 51.
These developments in the technical indicators in the 4-hour chart draw attention to a scenario in which the USD/HKD price could rise to test upper resistance levels.
USDHKD Forecast – Strategic Entry at $7.8
The 61.8% Fibonacci retracement level at $7.805 is the immediate resistance, which neighbors the descending trendline. The secondary resistance level is the 50% Fibonacci level, in conjunction with the Ichimoku cloud. That said, since the market is bearish, analysts at FxNews suggest waiting patiently for the USD/HKD price to complete the consolidation cycle.
The $7.805 and the %50 Fibonacci at $7.812 offer decent entry points for traders and investors to gradually increase their bets on the bearish trend. Therefore, monitoring these demand zones for bearish candlestick patterns such as doji, bearish engulfing, inverted hammer, or long-wick bearish candlestick patterns is recommended.
If this scenario comes into play and the price starts dipping again from the above-mentioned resistance areas, the downtrend could expand, primarily targeting $7.797, followed by the November 27, 2023, low at $7.785.
Bullish Scenario
The Ichimoku Cloud and the %50 Fibonacci level ($7.812) play the role between the bear and the bull market. If the USD/SGD price rises and stabilizes itself above this resistance level, today’s uptick could aim for the 38.2% Fibonacci ($7.818) followed by 23.6% at ($7.826).
USD/HKD Key Support and Resistance
Traders and investors should closely monitor the USD/CHF key levels below to make informed decisions and adjust their strategies accordingly as market conditions shift.
- Support: $7.797, $7.785
- Resistance: $7.805, $7.812, $7.818
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
