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The Canadian dollar is following oil prices as OPEC members are concluding a deal. But this is not the only mover of the loonie.

Here is their view, courtesy of eFXnews:

BTMU FX Strategy Research notes that CAD has been continued to rebound as of late  resulting in USD/CAD trading around back the 1.3400-level.

On the tech front, BTMU notes that the upside technical break-out above the 1.3600 level late last month provided a false bullish signal.

On positioning, BTMU notes that edlevated short speculative Canadian dollar positions are now being squeezed which is reinforcing the loonie’s current upward momentum. Positioning is one potential reason why the Canadian dollar strengthened so much yesterday following the BoC’s latest monetary policy meeting.

On the domestic front,  BTMU notes that the accompanying policy statement, the BoC acknowledged that the economic recovery in Canada has continued to surprise to the upside since their last meeting.

We continue to view the latest domestic developments as supportive for our anti-consensus view that USD/CAD will head lower towards the 1.3000-level in the year ahead,” BTMU concludes.

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