CHFCAD tanks -0.52% closing 69 pips lower
Swiss Franc/Canadian Dollar (CHFCAD) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
CHFCAD ended Tuesday at 1.3245 tanking 69 pips (-0.52%). This is the biggest single-day loss in over two weeks. Today's close at 1.3245 marks the lowest recorded closing price since February 28th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 1.3257, the pair confirmed its breakout through the previous session low after trading up to 12 pips below it intraday.
Daily Candlestick Chart (CHFCAD as at Apr 16, 2019):
Tuesday's trading range has been 103 pips (0.77%), that's above the last trading month's daily average range of 82 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHFCAD.
Three candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and two bearish patterns, the Bearish Closing Marubozu and the Black Candle. The last time a Bearish Closing Marubozu showed up on October 24, 2016, CHFCAD actually gained 0.40% on the following trading day.
Prices are trading close to the key technical support level at 1.3191 (S1). The forex pair closed back below the 200-day moving average at 1.3296. The FX pair was sold again around 1.3348 after having seen highs at 1.3349, 1.3349 and 1.3351 in the last three trading sessions. Obviously there is something going on at that level.
CHF/CAD shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish. With its 50-day moving average crossing above its 200-day moving average, the currency has entered a so-called "Golden Cross" for the first time since March 15th. Showing increasing upward momentum in the short and medium-term the "Golden Cross" is known to indicate a potential bull market on the horizon.
With prices trading close to this year's low at 1.3082, downside momentum could accelerate should the market break out to new lows for the year. Further selling might move prices lower should the market test March's nearby low at 1.3127.
Among the 17 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CHF/CAD. Out of 39 times, CHFCAD closed higher 76.92% 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 43.59% with an average market move of 0.04%.