GBPCAD closes below its opening price unable to hold early session gains
British Pound/Canadian Dollar (GBPCAD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
GBPCAD ended the month 4.24% higher at 1.7549 after losing 28 pips (-0.16%) today on high volume. Trading 87 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 15th, GBPCAD actually gained 0.24% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GBPCAD as at Jul 31, 2020):
Friday's trading range has been 163 pips (0.93%), that's above the last trading month's daily average range of 129 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for GBPCAD.
After trading down to 1.7512 earlier during the day, the forex pair bounced off the key technical support level at 1.7512 (S1). The failure to close below the support could increase that levels importance as support going forward.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 1.7157.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Trading close to May's high at 1.7705 we might see further upside momentum if potential buy stops at the level get triggered.
Among the three 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 57.17% 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 53.92% with an average market move of 0.11%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more