Chart Art: Downtrend Trades on USD/JPY and the Hang Seng Index (HSI)

Thinking of buying the U.S. dollar or the Hong Kong stock index futures?

Not before you’ve seen these charts!

Take a look at USD/JPY and HSI’s setups to see how much (or little) upside we can expect from the assets in the next trading sessions:

USD/JPY 4-Hour Forex Chart

USD/JPY bears have been in charge since late October when the pair hit a ceiling at 152.00.

December has been a good month for the dollar though, as USD/JPY bounced from a low near 134.00 and is now trading closer to 137.00.

Let’s see if USD/JPY can maintain its bullish momentum.

USD bulls are about to be tested by a trend line resistance that’s been around since USD/JPY started its downtrend. Not only that, but the 100 and 200 SMAs – which are far enough apart to hint at a strong downtrend – are just above USD/JPY’s current prices.

A rejection at the trend line exposes USD/JPY to a dip down to its December lows. We could even see new monthly lows before the year ends!

If you’re set on buying USD against JPY though, then you’ll want to do it once USD/JPY has cleared its trend line and 100 SMA resistance zones.

Hang Seng Index (HSI): Daily

Hang Seng Index (HSI) Daily Chart

If stock index futures are more your thing, then you won’t want to miss out on HSI’s Fib play!

The Hang Seng Index (HSI) is consolidating just below the 20,000 mark. Not surprising since the psychological level happens to line up with a major support in 2022 and the 61.8% Fibonacci retracement of July-November downtrend.

Will HSI see more losses?

Technical indicators currently favor more selling with Stochastic in the overbought zone and signaling a bearish divergence on the daily time frame.

Meanwhile, HSI’s current prices are also just below the 200 SMA and a trend line resistance that hasn’t been broken since Q1 2021.

HSI buyers might want to wait until the index busts above its established trend line on the daily.

If you’d rather sell HSI though, then you can start placing trading orders at current levels or wait for bearish momentum before making/adding to your positions.