HKDCHF closes above its opening price after recovering from early selling pressure
Hong Kong Dollar/Swiss Franc (HKDCHF) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
HKDCHF ended Wednesday at 0.1173 gaining 1 pip (0.09%). Trading up to 4 pips lower after the open, HKD/CHF managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (HKDCHF as at Sep 16, 2020):
Wednesday's trading range has been 8 pips (0.68%), that's slightly above the last trading month's daily average range of 8 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HKDCHF. Prices continued to consolidate within a tight trading range between 0.1168 and 0.1178 where it has been caught now for the whole last trading week.
Despite a weak opening the currency managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, three candlestick patterns are matching today's price action, the Bullish High-Wave Candle, the Bullish Spinning Top and the Tweezer Bottom which are known as bullish patterns. The last time a Bullish Spinning Top showed up on August 27th, HKDCHF actually lost -0.51% on the following trading day.
After trading down to 0.1168 earlier during the day, the FX pair bounced off the key technical support level at 0.1169 (S1). The failure to close below the support could increase that levels significance as support going forward. After spiking up to 0.1176 during the day, the forex pair found resistance at the 20-day moving average at 0.1174. The pair found buyers again today around 0.1168 for the third trading day in a row after having found demand at 0.1168 in the prior session and at 0.1169 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 0.1168 where further sell stops could get triggered. With prices trading close to this year's low at 0.1161, downside momentum might accelerate should the market break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Tweezer Bottom" stand out. Its common bullish interpretation has been confirmed for HKD/CHF. Out of 134 times, HKDCHF closed higher 46.27% 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 54.48% with an average market move of 0.10%.