CADCHF stuck within tight trading range
Canadian Dollar/Swiss Franc (CADCHF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CADCHF ended the week 0.73% higher at 0.6936 after losing 18 pips (-0.26%) today on low volume. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CADCHF as at May 22, 2020):
Friday's trading range has been 48 pips (0.69%), that's below the last trading month's daily average range of 67 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CADCHF. Prices continued to consolidate within a tight trading range between 0.6915 and 0.6977 where it has been caught now for the last three trading days.
After trading as low as 0.6915 during the day, the pair found support at the 20-day moving average at 0.6929. The last time this happened on February 24th, CADCHF actually lost -0.20% on the following trading day. After having been unable to move above 0.6970 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 0.6963.
The currency shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 0.6881 where further sell stops could get activated. Further buying might move prices higher should the market test April's nearby high at 0.7032.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for CAD/CHF. Out of 770 times, CADCHF closed lower 51.95% 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 54.55% with an average market move of -0.22%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more