HKDNZD closes higher for the 2nd day in a row
Hong Kong Dollar/New Zealand Dollar (HKDNZD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, HKDNZD ended the week -0.5% lower at 0.2001 after gaining 1 pip (0.05%) today on low volume. Trading up to 2 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (HKDNZD as at Feb 14, 2020):
Friday's trading range has been 6 pips (0.3%), that's far below the last trading month's daily average range of 13 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDNZD.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
After having been unable to move above 0.2002 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 0.2004. The last time this happened on Tuesday, HKDNZD lost -1.04% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Spinning Top" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for HKD/NZD. Out of 222 times, HKDNZD closed lower 53.60% 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 six trading days, showing a win rate of 50.00% with an average market move of -0.03%.