GBPHKD finds buyers at key support level
British Pound/Hong Kong Dollar (GBPHKD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
GBPHKD ended the month 0.4% higher at 9.6117 after gaining 788 pips (0.83%) today on low volume. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 9.6026, the currency confirmed its breakout through the previous session high after trading up to 106 pips above it intraday.
Daily Candlestick Chart (GBPHKD as at Jun 30, 2020):
Tuesday's trading range has been 1134 pips (1.19%), that's above the last trading month's daily average range of 986 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 GBPHKD.
Despite a weak opening the pair managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on June 22nd, GBPHKD gained 0.40% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 9.4998 earlier during the day, the forex pair bounced off the key technical support level at 9.5078 (S1). The failure to close below the support might increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 9.6711 (R1). After having been unable to move lower than 9.4957 in the previous session, GBP/HKD found buyers again around the same price level today at 9.4998.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for GBP/HKD. Out of 102 times, GBPHKD closed lower 50.98% 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 56.86% 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 0.82% and NZDUSD closing 0.53% higher. On the flipside the worst performers have been USDCAD closing -0.62% lower and USDCHF losing -0.41%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPZAR surging 1.31% and GBPJPY closing 1.16% higher. The worst performers of the day have been USDNOK tanking -1.51% and EURGBP closing -0.9% lower. Read more