HKDCAD closes lower for the 2nd day in a row
Hong Kong Dollar/Canadian Dollar (HKDCAD) Technical Analysis Report for Sep 17, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HKDCAD ended Thursday at 0.1699 losing 1 pip (-0.06%). Trading 9 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 within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HKDCAD as at Sep 17, 2020):
Thursday's trading range has been 12 pips (0.71%), that's slightly above the last trading month's daily average range of 11 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HKDCAD. Prices continued to consolidate within a tight trading range between 0.1694 and 0.1709 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns. The last time a Shooting Star showed up on May 25th, HKDCAD lost -1.44% on the following trading day.
Unable to break through the key technical resistance level at 0.1702 (R1), the currency closed below it after spiking up to 0.1709 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Although 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.
Selling might accelerate should prices move below the close-by swing low at 0.1694 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for HKD/CAD. Out of 179 times, HKDCAD closed higher 51.96% 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 53.63% with an average market move of 0.23%.