HKDNZD pushes through key technical resistance level
Hong Kong Dollar/New Zealand Dollar (HKDNZD) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, HKDNZD finished the week 1.19% higher at 0.1954 after gaining 5 pips (0.26%) today. Today's close at 0.1954 marks the highest recorded closing price since October 31, 2018. Closing above Thursday's high at 0.1950, the market confirmed its breakout through the previous session high after trading up to 7 pips above it intraday.
Daily Candlestick Chart (HKDNZD as at May 17, 2019):
Friday's trading range has been 11 pips (0.56%), that's slightly below the last trading month's daily average range of 13 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for HKDNZD.
Buyers managed to take out the key technical resistance level at 0.1953 (now S1), which is likely to act as support going forward.
Crossing above the upper Bollinger Band for the first time since April 24th, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 0.1928 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on April 23rd, HKDNZD gained 0.99% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(14) above 70" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for HKD/NZD. Out of 39 times, HKDNZD closed higher 51.28% 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 58.97% with an average market move of -0.05%.