GBPCAD still stuck within tight trading range
British Pound/Canadian Dollar (GBPCAD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
GBPCAD finished Thursday at 1.7110 gaining 257 pips (1.52%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GBPCAD as at Mar 26, 2020):
Thursday's trading range has been 429 pips (2.55%), that's above the last trading month's daily average range of 343 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 notably higher than usual for GBPCAD. Prices continued to consolidate within a tight trading range between 1.6547 and 1.7186 where it has been caught now for the whole last trading week.
Even with a weak opening GBP/CAD managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on Tuesday, GBPCAD actually lost -0.90% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 1.7056 (now S1), which is likely to act as support going forward. After spiking up to 1.7186 during the day, the FX pair found resistance at the 20-day moving average at 1.7176. After having been unable to move above 1.7172 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 1.7186.
Although the forex pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 1.7264 where further buy stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for GBP/CAD. Out of 578 times, GBPCAD closed lower 55.54% 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 52.77% with an average market move of -0.10%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDJPY losing -1.42%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more