GBPHKD closes below its opening price unable to hold early session gains
British Pound/Hong Kong Dollar (GBPHKD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
GBPHKD finished the month 5.52% higher at 10.1420 after edging lower 73 pips (-0.07%) today on high volume. Trading 544 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GBPHKD as at Jul 31, 2020):
Friday's trading range has been 772 pips (0.76%), that's slightly below the last trading month's daily average range of 801 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPHKD.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns. The last time a Shooting Star showed up on July 9th, GBPHKD actually gained 0.17% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 9.8573.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Shooting Star" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for GBP/HKD. Out of 64 times, GBPHKD closed higher 65.63% 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 seven trading days, showing a win rate of 50.00% with an average market move of -0.03%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more