HKDCHF closes above its opening price after recovering from early selling pressure
Hong Kong Dollar/Swiss Franc (HKDCHF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HKDCHF finished the month -3.6% lower at 0.1178 after gaining 5 pips (0.43%) today on high volume. Trading up to 4 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 16th, HKDCHF actually lost -0.74% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HKDCHF as at Jul 31, 2020):
Friday's trading range has been 11 pips (0.94%), that's far above the last trading month's daily average range of 8 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for HKDCHF.
Regardless of a weak opening the forex pair managed to close above the prior day's open and close, forming a bullish Engulfing Candle.
After having been unable to move above 0.1181 in the previous session, the pair ran into sellers again around the same price level today, failing to move higher than 0.1180.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 0.1202.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for HKD/CHF. Out of 186 times, HKDCHF closed higher 49.46% 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 eight trading days, showing a win rate of 50.00% with an average market move of 0.06%.