CADAUD finds buyers at key support level
Canadian Dollar/Australian Dollar (CADAUD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CADAUD ended Wednesday at 1.0387 edging higher 2 pips (0.02%). Trading up to 39 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CADAUD as at Sep 16, 2020):
Wednesday's trading range has been 79 pips (0.76%), that's slightly above the last trading month's daily average range of 70 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CADAUD.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on August 20th, CADAUD gained 0.51% on the following trading day.
After trading down to 1.0343 earlier during the day, the FX pair bounced off the key technical support level at 1.0372 (S1). The failure to close below the support could increase that levels importance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
As prices are trading close to September's high at 1.0541, upside momentum might speed up should CAD/AUD mark new highs for the month. Trading close to July's low at 1.0312 we could see further downside momentum if potential sell stops at the level get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for CAD/AUD. Out of 502 times, CADAUD closed higher 52.59% 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 53.19% with an average market move of 0.16%.