HKDUSD closes below its opening price unable to hold early session gains
Hong Kong Dollar/US Dollar (HKDUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HKDUSD ended the month 0.01% higher at 0.129022 after losing 2 pips (-0.0%) today on high volume. Trading 6 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below 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 (HKDUSD as at Jun 30, 2020):
Tuesday's trading range has been 16 pips (0.01%), that's slightly below the last trading month's daily average range of 20 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. Prices continued to consolidate within a tight trading range between 0.129016 and 0.129039 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Last Engulfing Bottom Pattern showed up on October 8, 2019, HKDUSD actually lost -0.01% on the following trading day.
Prices are trading close to the key technical resistance level at 0.129034 (R1). After having been unable to move above 0.129031 in the prior session, the pair ran into sellers again around the same price level today, missing to move higher than 0.129032.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the nearby swing high at 0.129037 where further buy stops might get activated. With prices trading close to this year's high at 0.129042, upside momentum could accelerate should the FX pair be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for HKD/USD. Out of 89 times, HKDUSD closed higher 56.18% 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 51.69% with an average market move of 0.01%.