HKDEUR tumbles -1.35% closing 16 pips lower
Hong Kong Dollar/Euro (HKDEUR) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, HKDEUR finished Thursday at 0.1169 tanking 16 pips (-1.35%). This is the biggest single-day loss in over two years. The last time we've seen such an unusually strong single-day loss on March 9th, HKDEUR actually gained 1.42% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 0.1184, the pair confirmed its breakout through the previous session low after trading up to 18 pips below it intraday.
Daily Candlestick Chart (HKDEUR as at Mar 26, 2020):
Thursday's trading range has been 21 pips (1.77%), that's slightly above the last trading month's daily average range of 18 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for HKDEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.1157 (S1). The forex pair closed back below the 50-day moving average at 0.1170 for the first time since March 16th.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for HKD/EUR. Out of 55 times, HKDEUR closed higher 65.45% 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 58.18% with an average market move of 0.28%.