CADNZD fails to close above 20-day moving average
Canadian Dollar/New Zealand Dollar (CADNZD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, CADNZD ended the month -2.5% lower at 1.1412 after edging higher 11 pips (0.1%) today. Trading up to 26 pips lower after the open, the FX pair 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 Jun 30, 2020):
Tuesday's trading range has been 52 pips (0.46%), that's far below the last trading month's daily average range of 89 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for CADNZD. Prices continued to consolidate within a tight trading range between 1.1360 and 1.1434 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
Prices are trading close to the key technical support level at 1.1373 (S1). After spiking up to 1.1434 during the day, the currency found resistance at the 20-day moving average at 1.1424. The last time this happened on June 2nd, CADNZD lost -0.65% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 1.1477 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 1.1360 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Its common bearish interpretation has been confirmed for CAD/NZD. Out of 177 times, CADNZD closed lower 51.98% 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 55.93% with an average market move of -0.12%.