GBPCAD closes below its opening price unable to hold early session gains
British Pound/Canadian Dollar (GBPCAD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GBPCAD finished the week -0.26% lower at 1.7032 after losing 22 pips (-0.13%) today. Trading 68 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, GBPCAD actually gained 0.52% on the following trading day. 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 (GBPCAD as at May 22, 2020):
Friday's trading range has been 108 pips (0.63%), that's below the last trading month's daily average range of 138 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPCAD. Prices continued to consolidate within a tight trading range between 1.6972 and 1.7123 where it has been caught now for the whole last trading week.
After trading down to 1.7015 earlier during the day, the market bounced off the key technical support level at 1.7021 (S1). The failure to close below the support could increase that levels importance as support going forward.
While the FX pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 1.6972 where further sell stops might get activated.
Among the five 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 583 times, GBPCAD closed higher 57.63% 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 54.20% with an average market move of 0.13%.
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