CADUSD closes within previous day's range after lackluster session
Canadian Dollar/US Dollar (CADUSD) Technical Analysis Report for Jul 01, 2020 | by Techniquant Editorial Team
CADUSD finished Wednesday at 0.7360 losing 6 pips (-0.08%) on low volume. Trading 17 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. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CADUSD as at Jul 01, 2020):
Wednesday's trading range has been 30 pips (0.41%), that's far below the last trading month's daily average range of 57 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for CADUSD.
After moving higher in the previous session, the pair closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After spiking up to 0.7382 during the day, the forex pair found resistance at the 20-day moving average at 0.7378. The last time this happened on May 5th, CADUSD lost -0.69% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 0.7415 where further buy stops might get triggered.
Among the five 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/USD. Out of 136 times, CADUSD closed lower 50.74% 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 57.35% with an average market move of -0.17%.