HKDCHF breaks back above 20-day moving average
Hong Kong Dollar/Swiss Franc (HKDCHF) Technical Analysis Report for May 25, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, HKDCHF ended Monday at 0.1253 gaining 1 pip (0.08%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (HKDCHF as at May 25, 2020):
Monday's trading range has been 4 pips (0.32%), that's far below the last trading month's daily average range of 8 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 HKDCHF.
One bullish candlestick pattern matches today's price action, the Tweezer Top. The last time a Tweezer Top showed up on April 7th, HKDCHF gained 0.24% on the following trading day.
The market managed to close back above the 20-day moving average at 0.1252 for the first time since May 14th. Unable to break through the key technical resistance level at 0.1254 (R1), the forex pair closed below it after spiking up to 0.1255 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 0.1250 in the prior session, HKD/CHF found buyers again around the same price level today at 0.1251.
Although the currency is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 0.1259 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 0.1248 where further sell stops might get activated. Further buying could move prices higher should the market test April's close-by high at 0.1265.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for HKD/CHF. Out of 549 times, HKDCHF closed lower 52.46% 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 10 trading days, showing a win rate of 49.18% with an average market move of -0.04%.