- The US dollar closes a three-day rally and pulls back below 1.3200.
- The loonie picks up amid a moderately positive market mood
- Longer-term, the pair remains on a negative channel from September 30 highs.
The US dollar has lost ground on Friday, pulling back from Thursday’s highs at 1.3255 to consolidate below 1.3200 on Friday’s late trading. The Canadian dollar has been favoured by a slightly brighter market mood to put an end to a three-day losing streak.
The US dollar eases as the risk sentiment improves
The greenback has given away gains on Friday, which has helped the risk-sensitive CAD to trim losses. Investors have shrugged off the disappointment regarding the poor prospects of a fiscal stimulus deal in the US and the tightening COVID-19 restrictions in Europe, which has reflected in the moderate advances on equity markets.
Macroeconomic data has offered support to the greenback. US retail consumption posted a larger than expected increase in September, easing concerns about the strength of US economy after the downbeat employment figures seen on Thursday.
USD/CAD remains trading within a downward trending channel
The daily chart shows the USD/CAD trading below a downward trending resistance line from late September highs. The par seems to have strong resistance at 1.3215, where the mentioned resistance line meets the 50-day SMA. A clear move above here might cancel the negative trend and set the pair towards 1.3335 (Oct 7 high) and 1.3420 (Sept 30 high)
On the downside, the pair might find at 1.3145 (Sept 15 low) and 1.3100 (October 12 low) before 1.3045 (Sept 4 low).
Technical levels to watch