CADCHF closes above its opening price after recovering from early selling pressure
Canadian Dollar/Swiss Franc (CADCHF) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CADCHF ended Tuesday at 0.6857 edging higher 4 pips (0.06%). Trading up to 32 pips lower after the open, CAD/CHF 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 failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CADCHF as at Aug 04, 2020):
Tuesday's trading range has been 53 pips (0.77%), that's slightly below the last trading month's daily average range of 54 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 higher than usual for CADCHF.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 0.6816 earlier during the day, the market bounced off the key technical support level at 0.6828 (S1). The failure to close below the support could increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 0.6894 (R1). After having been unable to move lower than 0.6810 in the prior session, the currency found buyers again around the same price level today at 0.6816. The last time this happened on July 29th, CADCHF actually lost -1.05% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the close-by swing high at 0.6886 where further buy stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for CAD/CHF. Out of 678 times, CADCHF closed lower 52.80% 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 52.51% with an average market move of -0.19%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.55% and USDCHF closing -0.49% lower. On the flipside the best performers have been AUDUSD closing 0.53% higher and EURUSD gaining 0.35%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.54% and EURZAR closing 1.39% higher. The worst performers of the day have been ZARJPY tanking -1.14% and USDCZK closing -0.92% lower. Read more