USD/CAD struggles for a firm direction, stuck in a range around 1.3200 mark
- USD/CAD seesawed between tepid gains/minor losses through the early North American session.
- A recovery in the global risk sentiment undermined the safe-haven USD and capped the upside.
- Weaker crude oil prices undermined the loonie and helped limit any deeper losses for the major.
The USD/CAD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, around the 1.3200 mark through the early North American session.
A combination of diverging forces failed to assist the pair to build on the previous day's goodish gains, instead led to a subdued/range-bound price action on the last day of the week. A slight improvement in the global risk sentiment – as depicted by a positive tone around the equity markets – weighed on the US dollar's safe-haven status.
However, growing market worries that a steep rise in new coronavirus cases could lead to renewed lockdown measures and hinder the global economic recovery helped limit any deeper USD slide. Adding to this, Friday's upbeat US monthly Retail Sales figures further provided some respite to the USD bulls and extended support to the USD/CAD pair.
Meanwhile, a fresh leg down in crude oil prices undermined the commodity-linked currency – the loonie. The Canadian dollar was further pressured by the disappointing Manufacturing Sales data for August, which, in turn, further contributed towards limiting the downside for the USD/CAD pair, at least for the time being.
Other economic data released this Friday showed that Industrial Production in the US unexpectedly fell 0.6% MoM in September as compared to the previous month's 0.4% increase. The data, however, did little to provide any meaningful impetus and largely passed unnoticed as the focus remains on development surrounding the US fiscal stimulus measures.
Technical levels to watch