AUDCAD breaks back above 50-day moving average
Australian Dollar/Canadian Dollar (AUDCAD) Technical Analysis Report for Aug 14, 2020 | by Techniquant Editorial Team
AUDCAD finished the week -0.69% lower at 0.9514 after gaining 59 pips (0.62%) today on low volume. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AUDCAD as at Aug 14, 2020):
Friday's trading range has been 80 pips (0.85%), that's far above the last trading month's daily average range of 69 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 AUDCAD. Prices continued to consolidate within a tight trading range between 0.9438 and 0.9518 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Even with a weak opening the market managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on August 5th, AUDCAD gained 0.93% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The FX pair managed to close back above the 50-day moving average at 0.9458. The pair was bought again around 0.9438 after having seen lows at 0.9439, 0.9468 and 0.9494 in the last three trading sessions. Obviously there is something going on at that level.
While the forex pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 0.9640 where further buy stops could get triggered. With prices trading close to this year's low at 0.0418, downside momentum might accelerate should the currency break out to new lows for the year. Further buying could move prices higher should the market test July's nearby high at 0.9697. Trading close to June's low at 0.9169 we might see further downside momentum if potential sell stops at the level get activated.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for AUD/CAD. Out of 107 times, AUDCAD closed higher 56.07% 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 65.42% with an average market move of 0.59%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are USDCAD gaining 0.32% and AUDUSD closing 0.31% higher. On the flipside the worst performers have been USDJPY closing -0.31% lower and NZDUSD losing -0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been EURCAD surging 0.56% and EURTRY closing 0.49% higher. The worst performers of the day have been USDMXN tanking -0.94% and CADJPY closing -0.63% lower. Read more