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Is it back to business for USD/CAD trend traders?

Risk-taking may have made a comeback during the Asian session but will it be enough to drag USD/CAD lower?

Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. to restrict travel from South Africa, 7 other countries as Omicron variant emerges

OPEC postpones technical meetings to evaluate Omicron impact

Japan reinstates ban on entry of foreign visitors as Omicron spreads

Australia reimposes COVID-19 border restrictions amid Omicron variant fears

U.S. stock futures, oil regain some ground after Omicron battering

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.K.’s mortgage approvals data at 9:30 am GMT
U.K.’s net individual lending at 9:30 am GMT
Canada’s current account numbers at 1:30 pm GMT
U.S. pending home sales at 3:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: USD/CAD

USD/CAD 1-hour Forex Chart
USD/CAD 1-hour Forex Chart

USD/CAD’s pullback from its 1.2800 highs hit a pause at around 1.2730 near the 38.2% Fibonacci retracement level and last Tuesday’s highs.

A bounce from current prices would mean back to business for USD/CAD traders who have been pricing in the Fed’s tapering and tightening timeline.

USD/CAD could surpass last week’s highs and flirt with the big 1.3000 handle if enough dollar bulls price in hawkish statements from Fed Chairman Powell and Treasury Secretary Yellen this week.

On the other hand, risk-taking, or expectations of higher oil prices on the back of OPEC and friends postponing their meetings could boost CAD higher. This could drag USD/CAD to the 61.8% Fib or the 100 SMA on the 1-hour time frame.