HSBC has agreed to pay just over $100m in penalties to settle a US Department of Justice probe into currency rigging. The payment comprises of $38.4m in restitution and a $63.1m fine, with the latter reflecting a 15pc reduction "in recognition of HSBC's cooperation during the investigation and its extensive remediation".
During the early hours of new trading session the yellow metal continued to lose value against the buck in a junior descending channel. Basically, the consolidation period might last until the exchange rate will hit the support line of a four-week long ascending channel.
Although yesterday's fluctuations required some adjustments, the main assumption remained unchanged. The cable is continuing to trade in a symmetrical triangle pattern whose upper trend line simultaneously represents the slope of a larger falling wedge formation. From dominant pattern's perspective the breakout should happen in southern direction towards support zone located between the 1.3338 and 1.3331 marks.
In result of the previous trading session the currency exchange rate made a breakout from the rising wedge formation. However, as the southern side was covered by the weekly PP and the 200-hour SMA the pair could not fall below the 1.3400 mark. In a similar manner, a resistance zone located between the 1.3440 and 1.3448 levels did not allow the pair to climb higher as well.
In line with expectations, the overall optimism related to progress made on tax reform and decreased probability of a government shutdown continued to push the cable downwards. Although the pair has crossed the 200-hour SMA, the further plunge was temporarily stopped by the monthly PP at located at the 1.3372 level.
Unfortunately, neither existence of a rising wedge formation, nor the weekly R1 or the 50% Fibonacci retracement level stopped the rate from breaking to the top. However, this does not automatically mean dissolution of the pattern, as it still stay in force by making readjustment of the boundaries. Regardless of existence of the figure, in order to continue moving upwards, the pair will need to cross strong resistance zone located between the 112.62 and 12.70 marks.
In line with expectations, the cable continued to gradually moving to the bottom after making a rebound from the upper edge of a currently active ascending channel that was additionally secured by resistance line at the 1.3338 mark. In first hours of this trading session the pair managed to bypass the weekly R1 at 1.3300 and the 55-hour SMA at 1.3293, which suggests that the rate is likely to reach the opposite side of the channel by the end of the day.
The yellow metal is continuing to trade against the buck at the intersection of large ascending channel and junior rising wedge formations. Although the larger pattern managed to constrain the bullish sentiment for now, but the rising 55-, 100- and 200-hour SMAs as well as ongoing concerns over implementation of the US President Donald Trump's tax plan suggest that such upward movement is going to continue and might actually reach the upper trend-line of another dominant descending channel near the 1,293.00 mark.
In the morning SNB released the Swiss FX reserves for October. The Swiss National Bank's foreign-currency reserves jumped by 17 billion Swiss francs ($17.04 billion) in the month, putting the central bank on track for another banner quarter after earning a record-high profit of 32.5 billion francs between July and September. The data increased strongly to $741.5 billion from $724.4billion. Tuesday's
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