CADUSD dominated by bears dragging the market lower throughout the day
Canadian Dollar/US Dollar (CADUSD) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CADUSD ended the week 0.2% higher at 0.7472 after tanking 43 pips (-0.57%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.7506, the currency confirmed its breakout through the previous session low after trading up to 43 pips below it intraday.
Daily Candlestick Chart (CADUSD as at Aug 07, 2020):
Friday's trading range has been 58 pips (0.77%), that's above the last trading month's daily average range of 45 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CADUSD.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Bullish Hikkake Pattern showed up on Monday, CADUSD gained 0.55% on the following trading day.
Prices broke below the key technical support level at 0.7490 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 0.7434 where further sell stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CAD/USD. Out of 231 times, CADUSD closed higher 55.41% of the time on the next trading day after the market condition occurred.