SGDCAD unable to break through key resistance level
Singapore Dollar/Canadian Dollar (SGDCAD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SGDCAD ended the month 0.15% higher at 0.9757 after losing 24 pips (-0.25%) today on high volume. Trading 28 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SGDCAD as at Jul 31, 2020):
Friday's trading range has been 76 pips (0.78%), that's far above the last trading month's daily average range of 53 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SGDCAD.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on July 6th, SGDCAD actually gained 0.24% on the following trading day.
Unable to break through the key technical resistance level at 0.9798 (R1), the market closed below it after spiking up to 0.9806 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move above 0.9802 in the previous session, the currency ran into sellers again around the same price level today, failing to move higher than 0.9806.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for SGD/CAD. Out of 268 times, SGDCAD closed higher 53.73% 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 57.46% with an average market move of 0.19%.