USDHKD rises to highest close since January 2nd

US Dollar/Hong Kong Dollar (USDHKD) Technical Analysis Report for Feb 20, 2020 | by Techniquant Editorial Team


USDHKD soars, gaining 74 pips (0.1%) within a single day on high volume
USDHKD breaks above 50-day moving average for the first time since October 30, 2019
USDHKD rises to highest close since January 2nd
USDHKD unable to break through key resistance level
USDHKD closes higher for the 2nd day in a row


Moving higher for the 2nd day in a row, USDHKD ended Thursday at 7.7798 surging 74 pips (0.1%) on high volume. This is the biggest single-day gain in over a month. Today's close at 7.7798 marks the highest recorded closing price since January 2nd. Closing above Wednesday's high at 7.7735, USD/HKD confirmed its breakout through the previous session high after trading up to 114 pips above it intraday.

Daily Candlestick Chart (USDHKD as at Feb 20, 2020):

Daily technical analysis candlestick chart for US Dollar/Hong Kong Dollar (USDHKD) as at Feb 20, 2020

Thursday's trading range has been 140 pips (0.18%), that's far above the last trading month's daily average range of 54 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDHKD.

One bullish candlestick pattern matches today's price action, the White Candle.

The market managed to close above the 50-day moving average at 7.7769 for the first time since October 30, 2019. Unable to break through the key technical resistance level at 7.7841 (R1), the pair closed below it after spiking up to 7.7849 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.

Crossing above the upper Bollinger Band for the first time since August 5, 2019, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 7.7691 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on August 5, 2019, USDHKD actually lost -0.09% on the following trading day.

Although the forex pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Up Move" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/HKD. Out of 127 times, USDHKD closed lower 55.12% 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 eight trading days, showing a win rate of 57.48% with an average market move of -0.01%.

With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are AUDUSD losing -0.96% and NZDUSD closing -0.81% lower. On the flipside the best performers have been USDJPY closing 0.67% higher and USDCAD gaining 0.3%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.45% and USDZAR closing 0.97% higher. The worst performers of the day have been AUDCHF tanking -0.94% and AUDHKD closing -0.86% lower. Read more

Market Conditions for USDHKD as at Feb 20, 2020

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