USDCAD dominated by bears dragging the market lower throughout the day
US Dollar/Canadian Dollar (USDCAD) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDCAD finished Tuesday at 1.3319 losing 74 pips (-0.55%). Today's close at 1.3319 marks the lowest recorded closing price since February 25th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 1.3380, the forex pair confirmed its breakout through the prior session low after trading up to 62 pips below it intraday.
Daily Candlestick Chart (USDCAD as at Aug 04, 2020):
Tuesday's trading range has been 103 pips (0.77%), that's above the last trading month's daily average range of 81 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 slightly higher than usual for USDCAD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 1.3351 (now R1), which is likely to act as resistance going forward. The last time this happened on July 29th, USDCAD actually gained 0.65% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to June's low at 1.3316 we could see further downside momentum if potential sell stops at the level get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for USD/CAD. Out of 614 times, USDCAD closed higher 54.56% 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 53.09% with an average market move of 0.16%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are AUDUSD surging 0.53% and EURUSD gaining 0.35%. On the flipside the worst performers have been USDCHF closing -0.49% lower and USDJPY losing -0.22%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.54% and EURZAR closing 1.39% higher. The worst performers of the day have been ZARJPY tanking -1.14% and USDCZK closing -0.92% lower. Read more