CADEUR closes above its opening price after recovering from early selling pressure
Canadian Dollar/Euro (CADEUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CADEUR finished the month -3.46% lower at 0.6331 after surging 43 pips (0.68%) today on high volume. This is the biggest single-day gain in over two weeks. Trading up to 28 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 (CADEUR as at Jul 31, 2020):
Friday's trading range has been 83 pips (1.32%), that's far above the last trading month's daily average range of 47 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for CADEUR.
One bullish candlestick pattern matches today's price action, the White Candle.
Unable to break through the key technical resistance level at 0.6339 (R1), the forex pair closed below it after spiking up to 0.6341 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on July 24th, CADEUR lost -0.36% on the following trading day.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 0.6442.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 0.6252, downside momentum might speed up should CAD/EUR break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for CAD/EUR. Out of 76 times, CADEUR closed lower 56.58% of the time on the next trading day after the market condition occurred.