EURCAD still stuck within tight trading range
Euro/Canadian Dollar (EURCAD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EURCAD ended the week -0.01% lower at 1.5265 after edging lower 15 pips (-0.1%) today. Trading 41 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EURCAD as at May 22, 2020):
Friday's trading range has been 80 pips (0.52%), that's below the last trading month's daily average range of 126 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURCAD. Prices continued to consolidate within a tight trading range between 1.5166 and 1.5323 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on April 10th, EURCAD lost -0.60% on the following trading day.
Unable to break through the key technical resistance level at 1.5292 (R1), the currency closed below it after spiking up to 1.5323 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move lower than 1.5243 in the previous session, the market found buyers again around the same price level today at 1.5243.
The pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might speed up should prices move below the nearby swing low at 1.5166 where further sell stops could get triggered. Further selling might move prices lower should the market test April's close-by low at 1.5054.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for EUR/CAD. Out of 556 times, EURCAD closed lower 51.80% 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 54.86% with an average market move of -0.14%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more