USDHKD closes within prior day's range after lackluster session
US Dollar/Hong Kong Dollar (USDHKD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
USDHKD finished the month -0.0% lower at 7.7504 after gaining 3 pips (0.0%) today. 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 (USDHKD as at Jul 31, 2020):
Friday's trading range has been 8 pips (0.01%), that's far below the last trading month's daily average range of 17 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDHKD. Prices continued to consolidate within a tight trading range between 7.7497 and 7.7507 where it has been caught now for the last three trading days.
Despite a weak opening the market managed to close above the previous day's open and close, forming a bullish Engulfing Candle.
After trading down to 7.7499 earlier during the day, the currency bounced off the key technical support level at 7.7499 (S1). The failure to close below the support could increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 7.7509 (R1). The FX pair was bought again around 7.7499 after having seen lows at 7.7497, 7.7498 and 7.7499 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on July 15th, USDHKD gained 0.01% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the nearby swing low at 7.7497 where further sell stops could get activated. With prices trading close to this year's low at 7.7494, downside momentum might speed up should USD/HKD break out to new lows for the year. As prices are trading close to July's low at 7.7495, downside momentum could accelerate should the forex pair mark new lows for the month.
Among the eight 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 USD/HKD. Out of 161 times, USDHKD closed higher 52.17% 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 50.93% with an average market move of -0.00%.
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