USD/HKD Forecast Today - 24/06: USD Supports HKD (Chart)
Date
6/24/2024 4:40:42 AM
(MENAFN- Daily Forex)
The US dollar went back and forth during the course of the trading session on Friday, as we approached the HK$7.80 region. This is an area that I think does continue to offer support, and now the question is whether or not we are going to see buyers jumping back into the market to defend this area again. After all, we had seen buyers jumping in and defending this region earlier this spring, so it'll be interesting to see if that does in fact Linda being the case yet again.
Keep in mind that this pair is not necessarily free-floating, as the Hong Kong Monetary Authority keeps a tight rein on this pair. Essentially speaking, it is the Hong Kong dollar that is highly pegged to the US dollar as the monetary policy is one to simply follow the United States. This mirrors the idea of what we see on the mainland in China, so this is a pair that can be very noisy. You will notice that the overall range is between 7.80 on the bottom, and the 7.84 level on the top. In other words, the market is allowed to trade between 2 distinct levels, but the central bank has been known to get involved in the market from time to time to make sure that we stay“in balance.”
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Inflation in America
I believe that inflation in the United States continues to be the main story here, and therefore I think as long as we continue to see inflation in the United States stay high, and it is worth noting that during the Friday session the PMI numbers for both manufacturing and services came out hotter than anticipated, it will put upward pressure on the greenback over the longer term. With this being the case, I think that the market is likely to bounce from here, but I'm not necessarily looking for a massive move.
At the end of the day, I think we will probably move toward the 50-Day EMA, which is closer to the 7.8150 level, and dropping. If we can break above there, then the 7.8190 level would be where I would be looking next, where the 200-Day EMA sits. Underneath, I believe that the 7.80 level will continue to be significant support.
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