HKDUSD runs into sellers again around 0.128768
Hong Kong Dollar/US Dollar (HKDUSD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
HKDUSD ended the week -0.02% lower at 0.128732 after losing 13 pips (-0.01%) today on low volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (HKDUSD as at Feb 14, 2020):
Friday's trading range has been 48 pips (0.04%), that's far below the last trading month's daily average range of 86 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HKDUSD.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on Wednesday, HKDUSD actually gained 0.05% on the following trading day.
Unable to break through the key technical resistance level at 0.128765 (R1), the pair closed below it after spiking up to 0.128768 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move above 0.128775 in the prior session, the FX pair ran into sellers again around the same price level today, missing to move higher than 0.128768.
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 0.128815 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 0.128667 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for HKD/USD. Out of 1,021 times, HKDUSD closed lower 49.85% 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 51.22% with an average market move of -0.00%.