Canadian Dollar extends recovery in calm Friday trading session.
Iran has downplayed the alleged drone attack from Israel, which has eased risk aversion.
USD/CAD is testing the neckline of a bearish S&H pattern at 1.3725.
The Canadian Dollar (CAD) is trading higher for the third consecutive session on Friday and is on track for a moderate weekly recovery after a sharp sell-off over the previous two weeks. A softer US Dollar in the absence of key macroeconomic data and easing fears about the Middle East conflict are contributing to the Loonie’s recovery.
Investors seem to have come to terms with the idea that the Federal Reserve (Fed) will delay and scale down its monetary easing plans, which is allowing some take-profit for the US Dollar. Chicago Fed President Austen Goolsbee has reiterated the lack of progress on inflation, but the impact on the US Dollar has been marginal.
Furthermore, the Iranian authorities have played down rumours about a drone attack by Israel. With no further threat to an escalation of the conflict, the immediate risk aversion has gradually eased, which is good for the CAD.
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