- The US dollar stops a three-day rally and retreats below 1.3200.
- Canadian Dollar Recovers Amid Moderately Positive Market Sentiment
- Longer term, the pair remains in a negative channel from September 30 highs.
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