HKDGBP breaks below Tuesday's low
Hong Kong Dollar/British Pound (HKDGBP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, HKDGBP ended Wednesday at 0.0995 losing 6 pips (-0.6%) on high volume. Closing below Tuesday's low at 0.0998, the market confirmed its breakout through the prior session low after trading up to 6 pips below it intraday.
Daily Candlestick Chart (HKDGBP as at Sep 16, 2020):
Wednesday's trading range has been 10 pips (1.0%), that's slightly below the last trading month's daily average range of 10 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for HKDGBP.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on August 28th, HKDGBP lost -0.10% on the following trading day.
After trading as low as 0.0992 during the day, the pair found support at the 50-day moving average at 0.0994.
Although the currency is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 0.0990 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for HKD/GBP. Out of 72 times, HKDGBP closed lower 56.94% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 62.50% with an average market move of -0.29%.