SGDCAD closes below its opening price unable to hold early session gains
Singapore Dollar/Canadian Dollar (SGDCAD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SGDCAD finished the week -0.59% lower at 0.9826 after losing 17 pips (-0.17%) today. Today's close at 0.9826 marks the lowest recorded closing price since April 14th. Trading 19 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. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SGDCAD as at May 22, 2020):
Friday's trading range has been 52 pips (0.53%), that's slightly below the last trading month's daily average range of 59 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SGDCAD. Prices continued to consolidate within a tight trading range between 0.9805 and 0.9864 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern. The last time a Last Engulfing Bottom Pattern showed up on April 6th, SGDCAD actually lost -0.20% on the following trading day.
Prices are trading close to the key technical resistance level at 0.9844 (R1).
Though 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 accelerate should prices move below the close-by swing low at 0.9798 where further sell stops might get activated. Further selling could move prices lower should the market test April's nearby low at 0.9789.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for SGD/CAD. Out of 65 times, SGDCAD closed higher 64.62% 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 64.62% with an average market move of 0.34%.