USDHKD trade ideas
USDHKD LongThe situation in Hong Kong is not expected to get any better in the coming weeks. This is purely a technical analysis and does not factor in news. Resistance tested thrice with higher lows forming, ascending triangle pattern is prominent here.
HKD peg: Re-evaluation forecastingAnother currency in China's tool kit is not being discussed enough. With the current trade war escalating to a global currency crisis coupled to a technology war, and market listings. Reserves of the HKD have been depleted in previous defence of the HK/USD peg.
Hong Kong to break US Dollar Peg?What a week so far. This week we saw the USDCNH break above the 7.00 level, something I have mentioned in my posts for Bitcoin strength.
China has said this was normal, due to tariffs and fundamental reasons, while President Trump and the US Treasury think it is an act of currency manipulation.
I have spoken about the US and China trade war on my blog. China is in it for the long game. They will be patient for a weaker US President from the Democrat side. They know the US stock markets are President Trump's Achilles Heel. He needs them up to win re-election ('Keeping America Great"). If markets continue to tumble it will be President Trump who is forced to the trade table to take a China dictated deal. China does not need to worry about elections.
So as the Yuan devalues, Chinese money is running into Gold and Bitcoin as mentioned in my previous posts. All governments are devaluing their currencies. New Zealand just cut rates 50 basis points yesterday!
Mainland China has been coming down hard on Hong Kong, attempting to get rid of the British Law. This is a way to stop money leaving from China (generally money from mainland goes to Hong Kong and then from there to Australia or Canada etc) and was also a way for China to get away from tariffs by shipping from Hong Kong (not under tariffs).
Hong Kong is in trouble. It is the most expensive city in the world with a large real estate bubble and there are some credit and debt problems there now.
If you listen to Kyle Bass, he has said that Hong Kong has used 80% of their US Dollar reserves to maintain the peg under 7.85. Will this peg be broken? Many think so. They are running out of US Dollars and not in the best position to buy more Dollars.
If the Chinese army does march into Hong Kong, which is probable, expect the HKD peg to break. Probably will peg to the Yuan. As Kyle Bass has said, shorting Hong Kong is the best play right now. Many hedge fund managers have spoken on this as well. Shorting the Hang Seng and the Hong Kong Dollar are ways to play this trade.
Why will China march into Hong Kong? If the people are up in arms due to Yuan devaluation, and the Chinese Communist Party feels threatened, they will go to war. The CCP will not give up control over China. War is the best way to unify the people and also blame others for domestic problems. When all else fails, they take you to war.
When this peg breaks, I expect MORE Hong Kong money to run into Bitcoin and Gold and Silver. So I am still bullish on Bitcoin but remember, as discussed previously, it is all about CHINESE MONEY.
XABCD Pattern Not to much information on this publish due to time, however trade taken a D point has formed along with a suitable reversal at the level. Two green lines are where it is predicted to get too. i have placed a 1:1 risk:reward however it is before the first take profit, hence if it starts to go that way the probability is higher that it will meet that target.
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SHORT
Potential Long USDHKDHello Traders, welcome to my trade idea on USDHKD, we have a good pattern here so the price possible to go back to the resistance
Sell USD/HKDThis is just a journal for me. I strongly warn you to not take this in your real account. Good luck!
FX Market Setups Overview for this week #forex #fx #tradingFX Market Setups Overview for this week #forex #fx #trading
USDHKD and the HKMA delimaNot my own idea but Kyle Bass points out 80% of the HKMA's "war chest" currency board reserves have been used maintaining the upper peg.
Trumps trade war is putting extra pressure on this peg breaking. Last time we saw a peg break was the SNB Frac's +30% 1500+ pips in 5 minute appreciation. There are only three routes for them they can raise more money in the domestic economy, they can raise HKD interest rates, or they can break the peg back to a free float system like the SNB.
USDHKD back to back harmonic patterns?Most of the time this pair isn't really tradable.
It's just an interesting record to see how it deal with the patterns!
Let's see how it goes!
USD/HKD Short ScenarioPossible scenario. Watching for bearish break of trendline. If so, would watch for price to reach key level as noted in the market, which also happens to land at 61.8% fib level. For educational and demonstration purposes only. Trade at your own risk.
Hong Kong Dollar Strengthens on Rate SpikeThis is an excerpt from MACRO BRIEF: Hong Kong Dollar Strengthens on Rate Spike originally published March 10, 2019.
The short-HKD trade is nearly consensus, which reminds me of the short-yuan trade a few years ago that was largely snuffed out by the PBOC.
Problem here, though, is the HKMA's attempts to draw in HKD inflows have been superficial at best. Additionally, with China likely continuing using Hong Kong as a dollar ATM it is hard to estimate how long the strength would last.
The 3.7 sigma move has pulled in quite a bit but still remains extended. 7-day ROC saw its largest spike since December when the HIBOR 1M and 3M futures converged.
We'll continue to monitor the situation, but prolonged elevation of rates could be a problem considering that Hong Kong's economy is strongly interest rate sensitive with banking assets and domestic credit to public sector as a percentage of GDP at well over 200 percent.
To access original charts and commentary on this blog post click here .
USDHKD and the "problem" emerging market countries in 20182018 saw a rolling bear market in emerging markets, with a lot of EM currencies getting crushed vs. the dollar. Why has everyone forgotten about this? The issues are systemic, and the buy-down of the USDHKD peg only kept the eurodollar market functioning for long enough to forestall some further pain. Now that the peg has been hit again, we are starting to yet again, see renewed emerging market problems.
Shanghai Composite / S&P 500 ratio & The USDHKD PegUnsurprisingly, similar to the currency, the outperformance of the Chinese stock market vs. the S&P 500 falters when the Chinese currency can't be sustained. Not quite as direct of a relationship, but this clearly affects emerging markets, which are highly indebted to the dollar.
This is visible if you go back further as well - the broad rolling emerging market problems all occurred starting when the USDHKD peg was hit in April 2018. April 18th, 2018 was a pivotal day in that regard. Also, it's no surprise that EM currency problems are starting to suddenly become problematic once again....
China really does own us!Looking at this chart you will see the Hong Kong Dollar as it compares to the Dow Jones as of late. Notice, that each time the Dow Jones "sells off" it is preceded by a devaluation of the Kong Kong Dollar.
Bought and Paid for by China.... :)
Only One Way To GoThe Value of this currency pair is at an all-time high. A level that has never been breached and exhibits an unnaturally potent downward force on price. Buying at this level would most likely turn out to be a giant mistake. As such, selling is the only option. Wait for RSI crossover and place stop above resistance. If this coincides with spring equinox then a drastic move could occur.
USDHKD and its relationship to Emerging Markets vs. US EquitiesUSDHKD is a proxy for monetary "stuff" going on in China. China can stimulate when this peg is not being hit as most of their dollar funding seems to be running through Hong Kong. When the peg gets hit however, we see noticeable problems and effects around the world. We are now about to see the peg get re-hit once again, which will likely kick off another wave of unexpected monetary issues around the world similar to what we saw last April.
We will likely see more emerging market underperformance once again relative to US equities if this is in fact indicative of what is going on in the shadows.
High Probability trade on USDHKDThis pair is a fixed pegged currency pair ....right now price is just 10pips away from 7.8500 peg price. Going short is the only way for this pair at the moment except there is a change on the agreement on how this currency pair is managed.
Expecting HKD to adjust to higher band, or esle...?been monitoring this pair for almost a year. expecting something between march to may
