HKDAUD breaks below key technical support level
Hong Kong Dollar/Australian Dollar (HKDAUD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
HKDAUD ended Thursday at 0.2128 losing 37 pips (-1.71%). Trading 32 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, HKDAUD lost -1.95% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HKDAUD as at Mar 26, 2020):
Thursday's trading range has been 78 pips (3.6%), that's slightly above the last trading month's daily average range of 65 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for HKDAUD.
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.
Prices broke below the key technical support level at 0.2153 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 0.2123 in the previous session, the FX pair found buyers again around the same price level today at 0.2119.
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 Support/Resistance based market condition "Price broke through Technical Support S1" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for HKD/AUD. Out of 366 times, HKDAUD closed higher 51.09% 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 10 trading days, showing a win rate of 53.83% with an average market move of 0.33%.