CADAUD breaks below key technical support level
Canadian Dollar/Australian Dollar (CADAUD) Technical Analysis Report for Aug 15, 2019 | by Techniquant Editorial Team
CADAUD ended Thursday at 1.1082 losing 45 pips (-0.4%) on high volume. Closing below Wednesday's low at 1.1112, the pair confirmed its breakout through the prior session low after trading up to 54 pips below it intraday.
Daily Candlestick Chart (CADAUD as at Aug 15, 2019):
Thursday's trading range has been 74 pips (0.66%), that's slightly below the last trading month's daily average range of 78 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CADAUD.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Bullish Hikkake Pattern showed up on July 12th, CADAUD actually lost -0.43% on the following trading day.
Prices broke below the key technical support level at 1.1099 (now R1), which is likely to act as resistance going forward.
Although 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.
As prices are trading close to August's low at 1.1028, downside momentum might accelerate should the FX pair mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for CAD/AUD. Out of 123 times, CADAUD closed lower 52.03% 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 10 trading days, showing a win rate of 52.85% with an average market move of -0.07%.