USDHKD pushes through key technical resistance level
US Dollar/Hong Kong Dollar (USDHKD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDHKD finished the week 0.07% higher at 7.7564 after gaining 14 pips (0.02%) today on high volume. Today's close at 7.7564 marks the highest recorded closing price since March 20th. Trading up to 28 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 14th, USDHKD actually lost -0.02% on the following trading day. Closing above Thursday's high at 7.7553, USD/HKD confirmed its breakout through the previous session high after trading up to 26 pips above it intraday.
Daily Candlestick Chart (USDHKD as at May 22, 2020):
Friday's trading range has been 60 pips (0.08%), that's far above the last trading month's daily average range of 25 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 USDHKD.
Buyers managed to take out the key technical resistance level at 7.7558 (now S1), which is likely to act as support going forward.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 7.7519.
While the 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 five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/HKD. Out of 173 times, USDHKD closed lower 52.60% of the time on the next trading day after the market condition occurred.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more