CADEUR closes within prior day's range after lackluster session
Canadian Dollar/Euro (CADEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CADEUR ended the week unchanged at 0.6551 after edging higher 6 pips (0.09%) today. Trading up to 18 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CADEUR as at May 22, 2020):
Friday's trading range has been 34 pips (0.52%), that's below the last trading month's daily average range of 54 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CADEUR. Prices continued to consolidate within a tight trading range between 0.6526 and 0.6594 where it has been caught now for the whole last trading week.
Even with a weak opening the currency managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on April 22nd, CADEUR gained 1.03% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 0.6526 earlier during the day, CAD/EUR bounced off the key technical support level at 0.6533 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 0.6528 in the previous session, the forex pair found buyers again around the same price level today at 0.6526.
The FX pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the nearby swing high at 0.6594 where further buy stops could get activated. As prices are trading close to May's high at 0.6637, upside momentum might accelerate should the pair mark new highs for the month.
Among the seven 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/EUR. Out of 540 times, CADEUR closed higher 51.85% 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 52.96% with an average market move of 0.07%.