HKDJPY dominated by bears dragging the market lower throughout the day
Hong Kong Dollar/Japanese Yen (HKDJPY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
HKDJPY ended Thursday at 14.14 losing 21 pips (-1.46%) on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 14.28, the pair confirmed its breakout through the previous session low after trading up to 19 pips below it intraday.
Daily Candlestick Chart (HKDJPY as at Mar 26, 2020):
Thursday's trading range has been 27 pips (1.88%), that's slightly below the last trading month's daily average range of 28 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 HKDJPY.
In spite of a strong opening the forex pair closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
After trading down to 14.09 earlier during the day, the market bounced off the key technical support level at 14.11 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on March 18th, HKDJPY gained 2.51% on the following trading day.
The FX pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's high at 14.42, upside momentum might speed up should the currency be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for HKD/JPY. Out of 504 times, HKDJPY closed higher 49.40% 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 54.56% with an average market move of 0.20%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDJPY losing -1.42%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more