HKDSGD closes above its opening price after recovering from early selling pressure


Hong Kong Dollar/Singapore Dollar (HKDSGD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team

Highlights

HKDSGD closes above its opening price after recovering from early selling pressure
HKDSGD closes within previous day's range

Overview

HKDSGD finished the month -1.39% lower at 0.1773 after gaining 2 pips (0.11%) today on high volume. Trading up to 5 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.

Daily Candlestick Chart (HKDSGD as at Jul 31, 2020):

Daily technical analysis candlestick chart for Hong Kong Dollar/Singapore Dollar (HKDSGD) as at Jul 31, 2020

Friday's trading range has been 9 pips (0.51%), that's far above the last trading month's daily average range of 7 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDSGD.

Even with a weak opening the market managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the Hammer.

Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 0.1788. The last time this happened on July 23rd, HKDSGD actually lost -0.22% on the following trading day.

The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.

Buying could speed up should prices move above the close-by swing high at 0.1798 where further buy stops might get triggered. With prices trading close to this year's low at 0.0000, downside momentum could accelerate should HKD/SGD break out to new lows for the year. Trading close to May's high at 0.1843 we might see further upside momentum if potential buy stops at the level get activated.

Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for HKD/SGD. Out of 33 times, HKDSGD closed lower 45.45% 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 10 trading days, showing a win rate of 60.61% with an average market move of -0.20%.


Market Conditions for HKDSGD as at Jul 31, 2020

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