EURCAD breaks above 50-day moving average for the first time since September 29th
Euro/Canadian Dollar (EURCAD) Technical Analysis Report for Oct 21, 2020 | by Techniquant Editorial Team
EURCAD ended Wednesday at 1.5591 gaining 70 pips (0.45%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 1.5585, the forex pair confirmed its breakout through the prior session high after trading up to 10 pips above it intraday.
Daily Candlestick Chart (EURCAD as at Oct 21, 2020):
Wednesday's trading range has been 89 pips (0.57%), that's slightly above the last trading month's daily average range of 80 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURCAD.
One bullish candlestick pattern matches today's price action, the White Candle.
EUR/CAD managed to close above the 50-day moving average at 1.5576 for the first time since September 29th. When this moving average was crossed above the last time on September 29th, EURCAD actually lost -0.68% on the following trading day. Prices are trading close to the key technical resistance level at 1.5596 (R1). After having been unable to move lower than 1.5506 in the previous session, the FX pair found buyers again around the same price level today at 1.5506.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the nearby swing high at 1.5660 where further buy stops could get triggered. As prices are trading close to October's high at 1.5660, upside momentum might accelerate should the pair mark new highs for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 50" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/CAD. Out of 124 times, EURCAD closed lower 58.06% 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 56.45% with an average market move of -0.15%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 1.52% and NZDUSD closing 1.11% higher. On the flipside the worst performers have been USDJPY closing -0.86% lower and USDCHF losing -0.2%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPCAD surging 1.65% and GBPHKD closing 1.52% higher. The worst performers of the day have been EURGBP tanking -1.17% and CADJPY closing -1.0% lower. Read more