SGDHKD finds buyers around 5.6988 for the forth day in a row
Singapore Dollar/Hong Kong Dollar (SGDHKD) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
SGDHKD finished the week 0.62% higher at 5.6994 after losing 117 pips (-0.2%) today on high volume. Trading 76 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SGDHKD as at Sep 18, 2020):
Friday's trading range has been 190 pips (0.33%), that's far below the last trading month's daily average range of 230 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SGDHKD. Prices continued to consolidate within a tight trading range between 5.6620 and 5.7178 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on September 8th, SGDHKD actually gained 0.33% on the following trading day.
Prices are trading close to the key technical support level at 5.6616 (S1). Unable to break through the key technical resistance level at 5.7138 (R1), the currency closed below it after spiking up to 5.7178 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. The pair was bought again around 5.6988 after having seen lows at 5.6862, 5.6891 and 5.6758 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 might speed up should prices move below the close-by swing low at 5.6862 where further sell stops could get activated. With prices trading close to this year's low at 0.0009, downside momentum might accelerate should the FX pair break out to new lows for the year. Trading close to July's low at 5.5470 we could see further downside momentum if potential sell stops at the level get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Its common bullish interpretation has been confirmed for SGD/HKD. Out of 123 times, SGDHKD closed higher 56.10% 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 69.11% with an average market move of 0.47%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.42% and AUDUSD closing -0.29% lower. On the flipside the best performers have been USDCHF closing 0.34% higher and USDCAD gaining 0.3%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.3% and USDZAR closing 1.05% higher. The worst performers of the day have been ZARJPY tanking -1.23% and GBPJPY closing -0.59% lower. Read more