The USD/CAD pair extended its recent upsurge for the third consecutive session and is currently placed at 17-month tops, just below mid-1.3400s.

A combination of negative factors kept exerting some heavy downward pressure on the Canadian Dollar and assisted the pair to build on this week's strong up-move from the 1.3160 region.

Against the backdrop of overnight bearish BoC monetary policy statement, hinting at downward revisions to its growth and inflation forecasts, a sharp fall in crude oil prices further dented sentiment surrounding the commodity-linked currency - Loonie.

Adding to this, a fresh wave of global risk-aversion trade, triggered by reviving fears of a further escalation in tensions between the US and China boosted the US Dollar's relative safe-haven status and provided an additional boost.

Investors turned sceptic over the recent progress made in trade relations between the world’s two largest economies following the arrest of a leading Chinese executive in Canada, who is now set to be extradited to the US to face charges of violating Iran sanctions.

Meanwhile, possibilities of some short-term trading stops being triggered on a sustained breakthrough the 1.3400 handle could also be one of the factors behind the pair’s latest leg of a sudden spike since the early European trading session. 

Moving ahead, today's economic docket, featuring the release of Canadian trade balance data, along with the ADP report and ISM non-manufacturing PMI from the US, will now be looked upon to grab some short-term trading opportunities.

The key focus, however, will be on the outcome of the closely watched OPEC meeting, and a subsequent presser at 1200 GMT, followed by a scheduled speech by the BoC Governor Stephen Poloz, later during the early North-American session.

Technical levels to watch

A follow-through buying has the potential to continue lifting the pair further towards the 1.3480 intermediate resistance en-route the key 1.3500 psychological mark. On the flip side, the 1.3400 handle now seems to protect the immediate downside and is followed by previous strong resistance, now turned support near the 1.3360-50 region

Reuters reports the following comments by the Iranian Oil Minister, as he speaks on the sidelines of the OPEC meeting.

Iran will stay in OPEC will not join any deal to cut output until sanctions are lifted oil market surplus is at least 1.3 mln bpd.

Pricing oil in Euros is not on our agenda.

Kirkuk oil production at 400,000 bpd.

Oil price of $ 60-70 acceptable to most OPEC members.

Russia will contribute to cut, the question is about the timing.

WTI (oil futures on NYMEX) changed course and dropped more than $ 2 to hit fresh four-day lows just under the 51 handle, as the bears fought back control amid increased talks among the OPEC members of a smaller-than-expected output cut. The OPEC members are calling for a 1 million barrels per day (bpd) of output cuts as against the 1.3 million bpd cuts called on by Saudi Arabia earlier this week.

Moreover, the recent comments by the Saudi Arabian Energy Minister Al-Falihthat no agreement is reached yet on the output cuts also added to the weight on the black gold. Further, the barrel of WTI also remains pressured by the risk-off trades on the European equity markets, as fresh US-China spat over the Chinese company, Huawei, CFO Meng dampens the overall market sentiment.

The updates from the OPEC meeting and its outcome on the output policy will dominate the oil-price movements in the day while the official US Government fuel stocks data published by the EIA could also offer some incentives to the oil traders.

Following the comments by the Saudi Energy Minister Al-Falih, his Iraqi counterpart is on the wires, commenting on the OPEC output cuts policy.

Key Points:

We are optimistic there will be an overall agreement at OPEC.

Oil price slide not in the interest of OPEC members.

We have not yet started actual discussion on output cuts Iraq will follow any decision by OPEC.

Does not mind if baseline in Sept or Oct 2018 output.

Iraq oil production capacity to reach 5 mln bpd in 2019.

US President Donald Trump fired another shot across OPEC’s bow on Wednesday, a day before the oil cartel is set to meet in Vienna to discuss possible production cuts.

“The World does not want to see, or need, higher oil prices!” the Tweet read, in part.

President Trump has issued a long string of Tweets directed at OPEC this year, lashing out at OPEC in the past for restricting production, which raises prices as supply tightens.

Oil prices were down on Wednesday, as OPEC has failed to give the market a clear signal that it will cut production, and that Russia would be on board with a production cut as well, should one be implemented.

WTI was trading down 0.08% at 2:24pm EST at $53.21, with Brent crude falling 0.16% to $61.98.

The fate of the OPEC meeting scheduled for December 6 and 7 is murky at best, with OPEC reportedly urging both Libya and Nigeria—two members exempt from the previous round of production cuts—to join in the production cut for this round. Without their buy-in, other members may feel less inclined to pick up their slack this time around. Iran, too, is a wildcard in the production cut talks, with its oil minister staunchly refusing to negotiate any production cuts for as long as the country remains under U.S. Sanctions.

The two major players in the production cut talks, Saudi Arabia and Russia, seem to be on board with a production cut, but the volume of cuts has yet to be determined, and it is also uncertain if they will go it alone should others refuse. Qatar’s withdrawal from the cartel after its decades-long history with the organization is but another worrying signal to OPEC that it may find additional resistance tomorrow.

President Trump’s Tweet could be seen as a warning to the cartel to measure any production cuts carefully, but OPEC has long been the target of Trump’s tweets, even prior to his presidency, chastising the organization for restricting oil during the near-$100/barrel days.