CADNZD closes below its opening price unable to hold early session gains
Canadian Dollar/New Zealand Dollar (CADNZD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CADNZD ended Thursday at 1.1965 losing 77 pips (-0.64%). Trading 118 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on March 16th, CADNZD actually gained 0.46% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CADNZD as at Mar 26, 2020):
Thursday's trading range has been 265 pips (2.2%), that's slightly below the last trading month's daily average range of 285 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for CADNZD. Prices continued to consolidate within a tight trading range between 1.1818 and 1.2160 where it has been caught now for the last three trading days.
After moving higher in the previous session, the market closed lower but above the prior day's open today, forming a bearish Harami Candle.
Prices are trading close to the key technical support level at 1.1840 (S1). Unable to break through the key technical resistance level at 1.2064 (R1), the pair closed below it after spiking up to 1.2160 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 1.1818 where further sell stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CAD/NZD. Out of 52 times, CADNZD closed higher 53.85% 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 57.69% with an average market move of 0.60%.