CADUSD closes lower for the 2nd day in a row
Canadian Dollar/US Dollar (CADUSD) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CADUSD finished the week -0.35% lower at 0.7428 after edging lower 1 pip (-0.01%) today. Trading up to 27 pips lower after the open, the forex 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 missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CADUSD as at May 17, 2019):
Friday's trading range has been 43 pips (0.58%), that's slightly above the last trading month's daily average range of 37 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 CADUSD.
Four candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man.
After trading down to 0.7400 earlier during the day, CAD/USD bounced off the key technical support level at 0.7405 (S1). The failure to close below the support might increase that levels significance as support going forward. Unable to break through the key technical resistance level at 0.7438 (R1), the market closed below it after spiking up to 0.7443 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. When prices bounced off a significant resistance level the last time on May 10th, CADUSD lost -0.50% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the nearby swing high at 0.7462 where further buy stops could get triggered. As prices are trading close to May's high at 0.7476, upside momentum might speed up should the pair mark new highs for the month. Further selling could move prices lower should the market test April's close-by low at 0.7395.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for CAD/USD. Out of 550 times, CADUSD closed lower 55.64% 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 52.91% with an average market move of -0.13%.