CADUSD breaks below Monday's low
Canadian Dollar/US Dollar (CADUSD) Technical Analysis Report for Jul 07, 2020 | by Techniquant Editorial Team
CADUSD ended Tuesday at 0.7351 losing 34 pips (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 0.7372, the pair confirmed its breakout through the prior session low after trading up to 24 pips below it intraday.
Daily Candlestick Chart (CADUSD as at Jul 07, 2020):
Tuesday's trading range has been 46 pips (0.62%), that's slightly below the last trading month's daily average range of 52 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CADUSD.
Regardless of a strong opening the forex pair closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on June 26th, CADUSD actually gained 0.21% on the following trading day.
The currency closed back below the 20-day moving average at 0.7363. After having been unable to move above 0.7397 in the prior session, CAD/USD ran into sellers again around the same price level today, failing to move higher than 0.7394.
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 might accelerate should prices move above the close-by swing high at 0.7397 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 0.7340 where further sell stops could get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CAD/USD. Out of 310 times, CADUSD closed higher 53.87% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after nine trading days, showing a win rate of 54.19% with an average market move of 0.08%.