CADNZD dominated by bulls lifting the market higher throughout the day
Canadian Dollar/New Zealand Dollar (CADNZD) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
CADNZD ended the week 0.67% higher at 1.1324 after surging 88 pips (0.78%) today. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CADNZD as at Aug 07, 2020):
Friday's trading range has been 113 pips (1.01%), that's above the last trading month's daily average range of 84 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CADNZD. Prices continued to consolidate within a tight trading range between 1.1217 and 1.1366 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the White Candle.
The currency managed to close back above the 20-day moving average at 1.1244. When this moving average was crossed above the last time on July 31st, CADNZD gained 0.38% on the following trading day. Prices are trading close to the key technical resistance level at 1.1386 (R1).
Though the forex pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 1.1366 where further buy stops might get triggered. Further buying could move prices higher should the market test July's nearby high at 1.1431.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Up Move" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for CAD/NZD. Out of 238 times, CADNZD closed lower 51.68% 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 53.78% with an average market move of -0.10%.