HKDCAD fails to close above 20-day moving average
Hong Kong Dollar/Canadian Dollar (HKDCAD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, HKDCAD finished the week -0.82% lower at 0.1805 after gaining 6 pips (0.33%) today. Closing above Thursday's high at 0.1802, the FX pair confirmed its breakout through the previous session high after trading up to 9 pips above it intraday.
Daily Candlestick Chart (HKDCAD as at May 22, 2020):
Friday's trading range has been 13 pips (0.72%), that's slightly below the last trading month's daily average range of 15 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HKDCAD.
Prices are trading close to the key technical support level at 0.1796 (S1). After spiking up to 0.1811 during the day, the market found resistance at the 20-day moving average at 0.1808. The last time this happened on February 24th, HKDCAD lost 0.00% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 0.1793 where further sell stops could get triggered. As prices are trading close to May's high at 0.1828, upside momentum might speed up should HKD/CAD mark new highs for the month. Further selling could move prices lower should the market test April's nearby low at 0.1787.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for HKD/CAD. Out of 680 times, HKDCAD closed higher 49.85% 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 53.09% with an average market move of 0.20%.