HKDNZD unable to break through key resistance level
Hong Kong Dollar/New Zealand Dollar (HKDNZD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, HKDNZD ended Wednesday at 0.1917 losing 5 pips (-0.26%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HKDNZD as at Sep 16, 2020):
Wednesday's trading range has been 16 pips (0.83%), that's slightly below the last trading month's daily average range of 19 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDNZD.
Unable to break through the key technical resistance level at 0.1925 (R1), the forex pair closed below it after spiking up to 0.1925 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on September 4th, HKDNZD actually gained 0.42% on the following trading day.
Though the pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 0.1901, downside momentum might accelerate should the FX pair break out to new lows for the year.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for HKD/NZD. Out of 65 times, HKDNZD closed higher 55.38% 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 55.38% with an average market move of 0.30%.