Originally published by AxiTrader
USD/CAD had two major breakouts in the past 24 hours. The currency pair first cleared resistance at 1.2670, and earlier today the one at 1.2780.
The short-term outlook has turned positive following the recent price action, and a rally towards 1.2950 seems likely.
What has been supporting USD/CAD? The Bank of Canada showed its dovish side today, following two surprise rate hikes. The recent economic data out of Canada has been rather disappointing as well.
Another factor is positioning. Speculators have built Canadian dollar long positions over the recent months, but some were forced to cover them as the trend has turned. With the US dollar recovering and oil prices under pressure following another failure at $53 resistance, Canadian dollar longs could become increasingly nervous.