CADAUD closes below its opening price unable to hold early session gains
Canadian Dollar/Australian Dollar (CADAUD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CADAUD finished Thursday at 1.1763 losing 60 pips (-0.51%). Trading 129 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CADAUD as at Mar 26, 2020):
Thursday's trading range has been 251 pips (2.12%), that's slightly below the last trading month's daily average range of 286 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for CADAUD.
After moving higher in the prior session, the pair closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Unable to break through the key technical resistance level at 1.1858 (R1), the market closed below it after spiking up to 1.1952 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on Tuesday, CADAUD actually gained 1.89% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CAD/AUD. Out of 69 times, CADAUD closed higher 57.97% 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 55.07% with an average market move of 0.10%.