USDHKD runs into sellers around 7.7506 for the forth day in a row
US Dollar/Hong Kong Dollar (USDHKD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
USDHKD finished Wednesday at 7.7501 flat. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (USDHKD as at Sep 16, 2020):
Wednesday's trading range has been 10 pips (0.01%), that's above the last trading month's daily average range of 8 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDHKD. Prices continued to consolidate within a tight trading range between 7.7496 and 7.7506 where it has been caught now for the last three trading days.
Five candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, one bearish pattern, the Gravestone Doji and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man. The last time a Gravestone Doji showed up on Monday, USDHKD lost -0.00% on the following trading day.
After trading down to 7.7496 earlier during the day, the market bounced off the key technical support level at 7.7499 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 7.7507 (R1). The FX pair was sold again around 7.7506 after having seen highs at 7.7506, 7.7506 and 7.7505 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 7.7509 where further buy stops could get triggered. With prices trading close to this year's low at 7.7494, downside momentum might accelerate should the pair break out to new lows for the year. Trading close to July's low at 7.7495 we could see further downside momentum if potential sell stops at the level get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Gravestone Doji" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for USD/HKD. Out of 53 times, USDHKD closed higher 52.83% 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 71.70% with an average market move of 0.02%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more