CADHKD still stuck within tight trading range
Canadian Dollar/Hong Kong Dollar (CADHKD) Technical Analysis Report for Dec 13, 2019 | by Techniquant Editorial Team
CADHKD ended the week 0.27% higher at 5.9242 after gaining 46 pips (0.08%) today on high volume. Trading up to 154 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CADHKD as at Dec 13, 2019):
Friday's trading range has been 315 pips (0.53%), that's above the last trading month's daily average range of 234 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CADHKD. Prices continued to consolidate within a tight trading range between 5.9004 and 5.9348 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns.
The FX pair managed to close back above the 100-day moving average at 5.9213. Unable to break through the key technical resistance level at 5.9347 (R1), CAD/HKD closed below it after spiking up to 5.9348 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The currency ran into sellers again today around 5.9348 for the third trading day in a row after having found sellers at 5.9318 in the previous session and at 5.9329 two days ago. The last time this happened on October 9th, CADHKD actually gained 0.29% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 100" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for CAD/HKD. Out of 78 times, CADHKD closed lower 58.97% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 58.97% with an average market move of -0.32%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are AUDUSD losing -0.49% and USDCAD closing -0.12% lower. On the flipside the best performers have been GBPUSD closing 1.2% higher and USDJPY gaining 0.04%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPAUD surging 1.63% and GBPZAR closing 1.37% higher. The worst performers of the day have been EURGBP tanking -1.3% and EURNOK closing -0.64% lower. Read more