HKDEUR closes above its opening price after recovering from early selling pressure
Hong Kong Dollar/Euro (HKDEUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HKDEUR ended the month -4.7% lower at 0.1095 after gaining 6 pips (0.55%) today on high volume. Trading up to 5 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HKDEUR as at Jul 31, 2020):
Friday's trading range has been 13 pips (1.19%), that's far above the last trading month's daily average range of 9 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDEUR.
Even with a weak opening HKD/EUR managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on July 16th, HKDEUR actually lost -0.35% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for HKD/EUR. Out of 515 times, HKDEUR closed lower 48.54% of the time on the next trading day after the market condition occurred.