The British Pound is advancing against the Hong Kong Dollar in a supposed medium-term ascending channel. Formation of the presumed pattern began in the end of July, which means that by now it consists of two reaction highs and one reaction low.
However, a number of indicators suggest that the second reaction low might appear in the nearest future.
- On the one hand, the rate is moving in a junior descending channel and faces pressure from the monthly R1 and the weekly PP. - But on the other hand, the pair is approaching the 200-hour SMA, which is moving precisely along the lower line of the senior formation.
If the above assumption is true, these two indicators should create a support strong enough to force the rate to make a rebound.