HKDJPY rallies, gaining 15 pips (1.11%) within a single day on high volume
Hong Kong Dollar/Japanese Yen (HKDJPY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HKDJPY finished the month -1.94% lower at 13.66 after surging 15 pips (1.11%) today on high volume. This is the biggest single-day gain in over four months. Closing above Thursday's high at 13.59, HKD/JPY confirmed its breakout through the prior session high after trading up to 9 pips above it intraday.
Daily Candlestick Chart (HKDJPY as at Jul 31, 2020):
Friday's trading range has been 24 pips (1.78%), 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 higher than usual for HKDJPY.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on April 15th, HKDJPY gained 0.43% on the following trading day. In spite of a weak opening the pair managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 13.75.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Up Move" stand out. Its common bullish interpretation has been confirmed for HKD/JPY. Out of 121 times, HKDJPY closed higher 52.89% 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 51.24% with an average market move of 0.24%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more