EURHKD finds buyers around 9.1356 for the forth day in a row
Euro/Hong Kong Dollar (EURHKD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURHKD ended Wednesday at 9.1579 losing 235 pips (-0.26%). Trading 253 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 9.1757, the currency confirmed its breakout through the previous session low after trading up to 401 pips below it intraday.
Daily Candlestick Chart (EURHKD as at Sep 16, 2020):
Wednesday's trading range has been 734 pips (0.8%), that's above the last trading month's daily average range of 634 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURHKD.
Prices are trading close to the key technical support level at 9.0648 (S1). The pair closed back below the 20-day moving average at 9.1766 for the first time since September 10th. When this moving average was crossed below the last time on September 4th, EURHKD lost -0.21% on the following trading day. EUR/HKD was bought again around 9.1356 after having seen lows at 9.1757, 9.1703 and 9.1555 in the last three trading sessions. Obviously there is something going on at that level.
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 accelerate should prices move above the close-by swing high at 9.2230 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 9.1090 where further sell stops could get activated. With prices trading close to this year's low at 6.5154, downside momentum might accelerate should the FX pair break out to new lows for the year. As prices are trading close to September's high at 9.3089, upside momentum could speed up should EURHKD mark new highs for the month. Trading close to July's low at 8.6690 we might see further downside momentum if potential sell stops at the level get triggered.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for EUR/HKD. Out of 124 times, EURHKD closed higher 59.68% 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 64.52% with an average market move of 0.39%.
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