HKDUSD unable to break through key resistance level
Hong Kong Dollar/US Dollar (HKDUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
HKDUSD ended Wednesday at 0.129031 flat. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HKDUSD as at Sep 16, 2020):
Wednesday's trading range has been 17 pips (0.01%), that's above the last trading month's daily average range of 14 pips. Weekly volatility is also higher, being slightly above 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 0.129017 and 0.129039 where it has been caught now for the whole last trading week.
Five candlestick patterns are matching today's price action, the Gravestone Doji and the Northern Doji which are both known as bearish patterns and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man. The last time a Gravestone Doji showed up on Monday, HKDUSD actually gained 0.00% on the following trading day.
Prices are trading close to the key technical support level at 0.129021 (S1). Unable to break through the key technical resistance level at 0.129034 (R1), the FX pair closed below it after spiking up to 0.129039 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The currency was bought again around 0.129022 after having seen lows at 0.129022, 0.129022 and 0.129024 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 0.129017 where further sell stops might get triggered. With prices trading close to this year's high at 0.129042, upside momentum could speed up should the forex pair be able to break out to new highs for the year. Trading close to July's high at 0.129041 we might see further upside momentum if potential buy stops at the level get activated. Further selling could move prices lower should the market test August's nearby low at 0.129006.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Its common bearish interpretation has been confirmed for HKD/USD. Out of 103 times, HKDUSD closed lower 48.54% 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 62.14% with an average market move of -0.01%.