- USD / CAD retreats after Thursday’s strong rally and after failing to sustain above 1.2500.
- Pullback in Treasury yields pulled the dollar down, but risk aversion pushed higher.
- The Canadian retail sales report will be released.
The USD / CAD extended its intraday decline and fell to 1.2458, marking a new low for the day. It then bounced and is trading 1.2475 / 80, negative but still close to 1.2500. The intraday tone remains bearish, but the pair remains on relevant very short-term support.
The fall in the USD / CAD and the fall of the dollar against currencies linked to commodities, and emerging markets, seems to be due to a correction in Thursday’s movements. In addition, Treasury yields are falling and oil is trying to regain some of the ground lost yesterday.
The Oil prices fell more than 7% on Thursday amid concerns of a new wave of COVID-19 infections in Europe and new restrictions. WTI after trading below, managed to return above $ 60 on Friday.
The economic calendar shows no data ahead of the US and the Canadian retail sales report stands out.
From a technical point of view, USD / CAD was rejected again above 1.2500. In case of returning above it could gain moment. Then, if there is a consolidation above 1.2525, it could lead the dollar to a more important appreciation. In the opposite direction, below 1.2460, the next support is seen at 1.2430.
Technical levels
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