USDCAD closes lower for the 2nd day in a row
US Dollar/Canadian Dollar (USDCAD) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDCAD finished the week -0.5% lower at 1.3124 after losing 13 pips (-0.1%) today. Trading 26 pips higher after the open, USD/CAD was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (USDCAD as at Oct 23, 2020):
Friday's trading range has been 51 pips (0.39%), that's below the last trading month's daily average range of 67 pips. Weekly volatility is also lower, being 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 Bearish Spinning Top.
Unable to break through the key technical resistance level at 1.3137 (R1), the FX pair closed below it after spiking up to 1.3161 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on October 15th, USDCAD lost -0.27% on the following trading day.
Though the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 1.3177 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 1.3081 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for USD/CAD. Out of 436 times, USDCAD closed higher 52.52% 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 56.19% with an average market move of 0.27%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are EURUSD surging 0.36% and AUDUSD gaining 0.31%. On the flipside the worst performers have been GBPUSD closing -0.33% lower and USDCHF losing -0.31%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been EURGBP surging 0.71% and EURSGD closing 0.47% higher. The worst performers of the day have been GBPPLN tanking -0.81% and GBPCHF closing -0.65% lower. Read more