HKDAUD finds buyers again around 0.1757
Hong Kong Dollar/Australian Dollar (HKDAUD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, HKDAUD finished Wednesday at 0.1766 losing 1 pip (-0.06%) on high volume. Trading 6 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. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HKDAUD as at Sep 16, 2020):
Wednesday's trading range has been 16 pips (0.91%), that's slightly below the last trading month's daily average range of 17 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDAUD.
Three candlestick patterns are matching today's price action, the Tweezer Bottom which is known as bullish pattern and two bearish patterns, the Bearish Spinning Top and the Bearish High-Wave Candle. The last time a Tweezer Bottom showed up on August 6th, HKDAUD gained 1.12% on the following trading day.
After trading down to 0.1757 earlier during the day, HKD/AUD bounced off the key technical support level at 0.1765 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 0.1757 in the prior session, the forex pair found buyers again around the same price level today at 0.1757.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 0.1740, downside momentum might accelerate should the pair break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish High-Wave Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for HKD/AUD. Out of 43 times, HKDAUD closed higher 65.12% 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 48.84% with an average market move of 0.21%.