CADUSD stuck within tight trading range
Canadian Dollar/US Dollar (CADUSD) Technical Analysis Report for Jul 03, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, CADUSD finished the week 1.03% higher at 0.7380 after gaining 7 pips (0.09%) today on low volume. Trading up to 9 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 0.7374, the forex pair confirmed its breakout through the prior session high after trading up to 9 pips above it intraday.
Daily Candlestick Chart (CADUSD as at Jul 03, 2020):
Friday's trading range has been 20 pips (0.27%), that's far below the last trading month's daily average range of 55 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CADUSD. Prices continued to consolidate within a tight trading range between 0.7340 and 0.7383 where it has been caught now for the last three trading days.
The FX pair managed to close back above the 20-day moving average at 0.7373 for the first time since June 23rd. When this moving average was crossed above the last time on June 22nd, CADUSD actually lost -0.20% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might accelerate should prices move below the close-by swing low at 0.7340 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for CAD/USD. Out of 426 times, CADUSD closed lower 52.35% 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 56.81% with an average market move of -0.26%.