USD / CAD cuts gains on Friday and consolidates below 1.3200

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The U.S. dollar it lost ground on Friday, falling back from Thursday’s highs at 1.3255 to consolidate below 1.3200 in late Friday trading. The loonie has been helped by a slightly brighter market environment to end a three-day losing streak.

US dollar declines as risk sentiment improves

The dollar trimmed gains on Friday, helping the risk-sensitive CAD trim losses. Investors have ignored disappointment over the poor prospects for a fiscal stimulus deal in the US and the tightening of COVID-19 restrictions in Europe, which has been reflected by moderate gains in equity markets.

Macroeconomic data has provided support for the dollar. US retail consumption posted a larger-than-expected rise in September, easing concerns about the strength of the US economy after low employment figures seen Thursday.

USD / CAD continues to trade within a downtrend channel

The daily chart shows USD / CAD trading below a resistance line trending down from the highs in late September. The pair appears to have strong resistance at 1.3215, where the mentioned resistance line meets the 50-day SMA. A clear move above here could cancel the negative trend and set the pair towards 1.3335 (October 7 high) and 1.3420 (September 30 high).

On the downside, the pair could find itself at 1.3145 (September 15 low) and 1.3100 (October 12 low) before 1.3045 (September 4 low).

Credits: Forex Street

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