CADHKD finds buyers around 5.8710 for the forth day in a row
Canadian Dollar/Hong Kong Dollar (CADHKD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CADHKD finished Wednesday at 5.8808 gaining 35 pips (0.06%). 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 Sep 16, 2020):
Wednesday's trading range has been 326 pips (0.55%), that's slightly below the last trading month's daily average range of 373 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CADHKD. Prices continued to consolidate within a tight trading range between 5.8679 and 5.9078 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Unable to break through the key technical resistance level at 5.9011 (R1), the FX pair closed below it after spiking up to 5.9036 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. When prices bounced off a significant resistance level the last time on September 10th, CADHKD actually gained 0.11% on the following trading day. The forex pair was bought again around 5.8710 after having seen lows at 5.8702, 5.8726 and 5.8679 in the last three trading sessions. Obviously there is something going on at that level.
Though CAD/HKD is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 5.9078 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 5.8702 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for CAD/HKD. Out of 491 times, CADHKD closed lower 55.40% 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 55.80% with an average market move of -0.15%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more