GBPCAD closes higher for the 2nd day in a row
British Pound/Canadian Dollar (GBPCAD) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, GBPCAD finished the month -3.15% lower at 1.7006 after gaining 44 pips (0.26%) today on high volume. Closing above Thursday's high at 1.6993, the forex pair confirmed its breakout through the previous session high after trading up to 127 pips above it intraday.
Daily Candlestick Chart (GBPCAD as at May 29, 2020):
Friday's trading range has been 213 pips (1.26%), that's far above the last trading month's daily average range of 133 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 higher than usual for GBPCAD.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
After trading down to 1.6907 earlier during the day, GBP/CAD bounced off the key technical support level at 1.6923 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on Tuesday, GBPCAD actually lost -0.79% on the following trading day. After spiking up to 1.7120 during the day, the currency found resistance at the 200-day moving average at 1.7030.
The pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could accelerate should prices move below the close-by swing low at 1.6846 where further sell stops might get activated.
Among the seven 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 54.03% with an average market move of 0.13%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are AUDUSD gaining 0.48% and EURUSD closing 0.25% higher. On the flipside the worst performers have been USDCHF closing -0.28% lower and NZDUSD losing -0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been AUDJPY surging 0.62% and AUDNZD closing 0.57% higher. The worst performers of the day have been USDHUF tanking -1.08% and USDSEK closing -0.86% lower. Read more