CHFCAD breaks below key technical support level
Swiss Franc/Canadian Dollar (CHFCAD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CHFCAD ended the month 2.45% higher at 1.4682 after losing 85 pips (-0.58%) today on high volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CHFCAD as at Jul 31, 2020):
Friday's trading range has been 184 pips (1.25%), that's far above the last trading month's daily average range of 109 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CHFCAD.
Prices broke below the key technical support level at 1.4697 (now R1), which is likely to act as resistance going forward.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 1.4483. The last time this happened on Monday, CHFCAD actually gained 0.41% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Its common bearish interpretation has been confirmed for CHF/CAD. Out of 89 times, CHFCAD closed lower 52.81% 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 59.55% with an average market move of -0.49%.