HKDJPY breaks below Tuesday's low
Hong Kong Dollar/Japanese Yen (HKDJPY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, HKDJPY finished Wednesday at 13.54 losing 7 pips (-0.51%). Today's close at 13.54 marks the lowest recorded closing price since July 30th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 13.59, the currency confirmed its breakout through the prior session low after trading up to 7 pips below it intraday.
Daily Candlestick Chart (HKDJPY as at Sep 16, 2020):
Wednesday's trading range has been 9 pips (0.66%), that's slightly above the last trading month's daily average range of 8 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HKDJPY.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 13.56 (now R1), which is likely to act as resistance going forward.
Crossing below the lower Bollinger Band for the first time since July 30th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 13.67 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on July 24th, HKDJPY lost -0.73% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to July's low at 13.44 we could see further downside momentum if potential sell stops at the level get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for HKD/JPY. Out of 136 times, HKDJPY closed higher 51.47% 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 63.97% with an average market move of 0.58%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more