HKDUSD runs into sellers around 0.129034 for the forth day in a row
Hong Kong Dollar/US Dollar (HKDUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HKDUSD finished the month 0.0% higher at 0.129026 after losing 5 pips (-0.0%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (HKDUSD as at Jul 31, 2020):
Friday's trading range has been 13 pips (0.01%), that's far below the last trading month's daily average range of 28 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HKDUSD. Prices continued to consolidate within a tight trading range between 0.129021 and 0.129037 where it has been caught now for the last three trading days.
Despite a strong opening HKD/USD closed below the prior day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical support level at 0.129017 (S1). Unable to break through the key technical resistance level at 0.129034 (R1), the currency closed below it after spiking up to 0.129034 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The FX pair was sold again around 0.129034 after having seen highs at 0.129037, 0.129036 and 0.129034 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on July 15th, HKDUSD lost -0.01% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 0.129037 where further buy stops could get activated. With prices trading close to this year's high at 0.129042, upside momentum might accelerate should the pair be able to break out to new highs for the year. As prices are trading close to July's high at 0.129041, upside momentum could speed up should the forex pair mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous two Highs" stand out. Its common bearish interpretation has been confirmed for HKD/USD. Out of 417 times, HKDUSD closed lower 49.64% 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 52.04% with an average market move of 0.00%.