EURHKD finds buyers around 9.0843 for the forth day in a row
Euro/Hong Kong Dollar (EURHKD) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
EURHKD ended Tuesday at 9.1471 gaining 308 pips (0.34%). Trading up to 318 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 30th, EURHKD actually lost -0.57% on the following trading day. Closing above Monday's high at 9.1429, the forex pair confirmed its breakout through the prior session high after trading up to 71 pips above it intraday.
Daily Candlestick Chart (EURHKD as at Aug 04, 2020):
Tuesday's trading range has been 657 pips (0.72%), that's below the last trading month's daily average range of 692 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURHKD. Prices continued to consolidate within a tight trading range between 9.0648 and 9.2293 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
Prices are trading close to the key technical support level at 8.5208 (S1). EUR/HKD was bought again around 9.0843 after having seen lows at 9.0648, 9.1151 and 9.0915 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 9.2293 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 9.0648 where further sell stops might get activated. With prices trading close to this year's low at 6.5154, downside momentum could accelerate should the pair break out to new lows for the year. Trading close to June's low at 8.6045 we might see further downside momentum if potential sell stops at the level get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for EUR/HKD. Out of 93 times, EURHKD closed higher 62.37% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after five trading days, showing a win rate of 67.74% with an average market move of 0.51%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.55% and USDCHF closing -0.49% lower. On the flipside the best performers have been AUDUSD closing 0.53% higher and EURUSD gaining 0.35%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.54% and EURZAR closing 1.39% higher. The worst performers of the day have been ZARJPY tanking -1.14% and USDCZK closing -0.92% lower. Read more