HKDAUD pushes through key technical resistance level
Hong Kong Dollar/Australian Dollar (HKDAUD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, HKDAUD ended the week -1.94% lower at 0.1972 after gaining 8 pips (0.41%) today on high volume. Closing above Thursday's high at 0.1970, the FX pair confirmed its breakout through the previous session high after trading up to 12 pips above it intraday.
Daily Candlestick Chart (HKDAUD as at May 22, 2020):
Friday's trading range has been 20 pips (1.02%), that's below the last trading month's daily average range of 25 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for HKDAUD.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on May 14th, HKDAUD actually gained 0.75% on the following trading day.
Buyers managed to take out the key technical resistance level at 0.1966 (now S1), which is likely to act as support going forward.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the close-by swing low at 0.1950 where further sell stops might get triggered. Trading close to March's low at 0.1925 we could see further downside momentum if potential sell stops at the level get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Its common bearish interpretation has been confirmed for HKD/AUD. Out of 81 times, HKDAUD closed lower 58.02% 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 eight trading days, showing a win rate of 50.62% with an average market move of -0.00%.