CADNZD finds buyers at key support level
Canadian Dollar/New Zealand Dollar (CADNZD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, CADNZD finished the week -1.96% lower at 1.1711 after edging higher 4 pips (0.03%) today. Trading up to 50 pips lower after the open, CAD/NZD 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 failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CADNZD as at May 22, 2020):
Friday's trading range has been 78 pips (0.67%), that's far below the last trading month's daily average range of 106 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 slightly lower than usual for CADNZD.
Two candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and one neutral pattern, the Doji.
After trading down to 1.1660 earlier during the day, the pair bounced off the key technical support level at 1.1688 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on May 8th, CADNZD gained 0.38% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further selling could move prices lower should the market test April's close-by low at 1.1659.
Among the five 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/NZD. Out of 594 times, CADNZD closed higher 53.20% 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 52.53% with an average market move of 0.08%.