EURHKD finds buyers at key support level
Euro/Hong Kong Dollar (EURHKD) Technical Analysis Report for Dec 13, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURHKD ended the week 0.17% higher at 8.6746 after losing 115 pips (-0.13%) today on high volume. Trading 364 pips higher after the open, EUR/HKD 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 (EURHKD as at Dec 13, 2019):
Friday's trading range has been 771 pips (0.89%), that's far above the last trading month's daily average range of 356 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURHKD.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. In spite of a strong opening the FX pair closed below the previous day's open and close, forming a bearish Engulfing Candle.
After trading down to 8.6635 earlier during the day, the currency bounced off the key technical support level at 8.6699 (S1). The failure to close below the support could increase that levels significance as support going forward. After spiking up to 8.7406 during the day, the pair found resistance at the 200-day moving average at 8.7395. The last time this happened on June 28th, EURHKD lost -0.75% on the following trading day. After having been unable to move lower than 8.6653 in the prior session, the market found buyers again around the same price level today at 8.6635.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might speed up should prices move below the close-by swing low at 8.6484 where further sell stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 200" stand out. Its common bearish interpretation has been confirmed for EUR/HKD. Out of 44 times, EURHKD closed lower 59.09% 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 seven trading days, showing a win rate of 59.09% with an average market move of -0.10%.
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