HKDGBP closes above its opening price after recovering from early selling pressure
Hong Kong Dollar/British Pound (HKDGBP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HKDGBP finished the month -5.19% lower at 0.0986 after gaining 1 pip (0.1%) today on high volume. Trading up to 5 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (HKDGBP as at Jul 31, 2020):
Friday's trading range has been 7 pips (0.71%), that's below 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 slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDGBP.
After moving lower in the previous session, the market managed to close higher but below the prior day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on May 1st, HKDGBP gained 0.48% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns.
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 0.1015.
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 Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Its common bullish interpretation has been confirmed for HKD/GBP. Out of 81 times, HKDGBP closed higher 46.91% 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 60.49% with an average market move of 0.51%.