CADHKD fails to close above 20-day moving average
Canadian Dollar/Hong Kong Dollar (CADHKD) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
CADHKD ended the week -0.21% lower at 5.8689 after losing 176 pips (-0.3%) today. Trading 128 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CADHKD as at Sep 18, 2020):
Friday's trading range has been 325 pips (0.55%), that's slightly below the last trading month's daily average range of 378 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CADHKD.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on September 10th, CADHKD actually gained 0.11% on the following trading day.
Prices are trading close to the key technical support level at 5.8514 (S1). After spiking up to 5.8993 during the day, the forex pair found resistance at the 20-day moving average at 5.8966.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 5.9036 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 5.8503 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Its common bearish interpretation has been confirmed for CAD/HKD. Out of 143 times, CADHKD closed lower 50.35% 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 60.14% with an average market move of -0.19%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.42% and AUDUSD closing -0.29% lower. On the flipside the best performers have been USDCHF closing 0.34% higher and USDCAD gaining 0.3%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.3% and USDZAR closing 1.05% higher. The worst performers of the day have been ZARJPY tanking -1.23% and GBPJPY closing -0.59% lower. Read more