GBPCAD finds buyers at key support level
British Pound/Canadian Dollar (GBPCAD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
GBPCAD finished the week 0.83% higher at 1.7289 after losing 15 pips (-0.09%) today on low volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GBPCAD as at Feb 14, 2020):
Friday's trading range has been 95 pips (0.55%), that's below the last trading month's daily average range of 131 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GBPCAD.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on December 12, 2019, GBPCAD actually gained 1.11% on the following trading day.
After trading down to 1.7222 earlier during the day, the currency bounced off the key technical support level at 1.7231 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 1.7357 (R1). After having been unable to move above 1.7324 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 1.7317.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the close-by swing high at 1.7324 where further buy stops could get activated. With prices trading close to this year's high at 1.7483, upside momentum might speed up should the pair be able to break out to new highs for the year. As prices are trading close to February's high at 1.7461, upside momentum could accelerate should the FX pair mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for GBP/CAD. Out of 586 times, GBPCAD closed higher 57.00% 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 10 trading days, showing a win rate of 54.27% with an average market move of 0.12%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.12% and EURUSD closing -0.08% lower. On the flipside the best performers have been USDCHF closing 0.28% higher and GBPUSD gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDSEK surging 0.51% and EURSEK closing 0.43% higher. The worst performers of the day have been EURHUF tanking -0.65% and USDHUF closing -0.58% lower. Read more