EURCAD crashes -0.67% on high volume
Euro/Canadian Dollar (EURCAD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
EURCAD finished the month 3.59% higher at 1.5796 after tanking 107 pips (-0.67%) today on high volume. This is the biggest single-day loss in over a month. Trading 71 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EURCAD as at Jul 31, 2020):
Friday's trading range has been 209 pips (1.31%), that's far above the last trading month's daily average range of 113 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for EURCAD.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 1.5771 earlier during the day, the FX pair bounced off the key technical support level at 1.5776 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on July 24th, EURCAD gained 0.36% on the following trading day.
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 1.5525.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 1.5994, upside momentum could accelerate should EUR/CAD be able to break out to new highs for the year.
Among the seven 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. While it is usually interpreted as bearish, it has actually shown to be bullish for EUR/CAD. Out of 78 times, EURCAD closed higher 58.97% of the time on the next trading day after the market condition occurred.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more