HKDEUR closes higher for the 2nd day in a row
Hong Kong Dollar/Euro (HKDEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, HKDEUR ended the week -0.76% lower at 0.1183 after gaining 5 pips (0.42%) today. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 0.1179, the pair confirmed its breakout through the previous session high after trading up to 5 pips above it intraday.
Daily Candlestick Chart (HKDEUR as at May 22, 2020):
Friday's trading range has been 7 pips (0.59%), that's slightly below the last trading month's daily average range of 84 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for HKDEUR. Prices continued to consolidate within a tight trading range between 0.1172 and 0.1195 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on May 11th, HKDEUR actually lost -0.42% on the following trading day.
Prices are trading close to the key technical resistance level at 0.1186 (R1).
Although the forex pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 0.1197 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 0.1172 where further sell stops could get triggered. As prices are trading close to May's high at 0.1198, upside momentum might accelerate should the FX pair mark new highs for the month. As prices are trading close to May's low at 0.1171, downside momentum could speed up should the currency mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Up Move" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for HKD/EUR. Out of 326 times, HKDEUR closed lower 50.61% of the time on the next trading day after the market condition occurred.