SGDHKD closes below its opening price unable to hold early session gains
Singapore Dollar/Hong Kong Dollar (SGDHKD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SGDHKD ended the month 1.38% higher at 5.6387 after losing 90 pips (-0.16%) today on high volume. Trading 157 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, SGDHKD actually gained 0.38% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SGDHKD as at Jul 31, 2020):
Friday's trading range has been 293 pips (0.52%), that's far above the last trading month's daily average range of 220 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SGDHKD. Prices continued to consolidate within a tight trading range between 5.6011 and 5.6616 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 5.4903 (S1). The currency was bought again around 5.6323 after having seen lows at 5.6262, 5.6169 and 5.6096 in the last three trading sessions. Obviously there is something going on at that level.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 5.5927.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 5.5701 where further sell stops could get triggered. With prices trading close to this year's low at 0.0009, downside momentum might accelerate should the pair break out to new lows for the year. Trading close to May's low at 5.4273 we could see further downside momentum if potential sell stops at the level get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for SGD/HKD. Out of 90 times, SGDHKD closed higher 56.67% 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 64.44% with an average market move of 0.53%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more