HKDUSD still stuck within tight trading range
Hong Kong Dollar/US Dollar (HKDUSD) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
HKDUSD finished the week 0.0% higher at 0.129032 after gaining 1 pip (0.0%) today. Today's close at 0.129032 marks the highest recorded closing price since July 6th. 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 Sep 18, 2020):
Friday's trading range has been 7 pips (0.01%), that's far below the last trading month's daily average range of 14 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 0.129022 and 0.129039 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern. The last time a Bullish Spinning Top showed up on Tuesday, HKDUSD lost 0.00% on the following trading day.
Unable to break through the key technical resistance level at 0.129034 (R1), the currency closed below it after spiking up to 0.129036 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 0.129017 where further sell 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. Trading close to July's high at 0.129041 we might see further upside momentum if potential buy stops at the level get triggered. Further selling could move prices lower should the market test August's close-by low at 0.129006.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Its common bearish interpretation has been confirmed for HKD/USD. Out of 115 times, HKDUSD closed lower 54.78% 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 57.39% with an average market move of -0.00%.