HKDCAD closes below its opening price unable to hold early session gains
Hong Kong Dollar/Canadian Dollar (HKDCAD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HKDCAD finished the month -1.41% lower at 0.1752 after losing 11 pips (-0.62%) today. Trading 6 pips higher after the open, HKD/CAD was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Monday's low at 0.1761, the market confirmed its breakout through the previous session low after trading up to 10 pips below it intraday.
Daily Candlestick Chart (HKDCAD as at Jun 30, 2020):
Tuesday's trading range has been 17 pips (0.96%), that's above the last trading month's daily average range of 14 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for HKDCAD.
Two candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Tweezer Top showed up on June 19th, HKDCAD actually lost -0.63% on the following trading day.
Unable to break through the key technical resistance level at 0.1768 (R1), the pair closed below it after spiking up to 0.1768 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The currency ran into sellers again today around 0.1768 for the third trading day in a row after having found sellers at 0.1768 in the prior session and at 0.1770 two days ago.
The forex pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might accelerate should prices move below the nearby swing low at 0.1740 where further sell stops could get triggered.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for HKD/CAD. Out of 290 times, HKDCAD closed higher 50.00% 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 56.90% with an average market move of 0.25%.