USD/CAD: Inability to overcome the 1.3540 hurdle can lead to a brief pullback – SocGen

The Canadian Dollar (CAD) has not enjoyed the best start to the year, weakening by around 2.2% against the US Dollar (USD). Economists at Société Générale analyze USD/CAD technical outlook.

USD/CAD remains delicately poised around the 200-DMA

USD/CAD has experienced a steady bounce after forming interim low near 1.3200/1.3180 last month. It has marched towards 1.3540, the 50% retracement from November.

The pair is evolving within crisscross moves around the 200-DMA which is having flattish slope; this denotes lack of clear direction. 

A break above 1.3540 would be essential to confirm extension in rebound. Inability to overcome this hurdle can lead to a brief pullback; last week low of 1.3380/1.3350 is first layer of support near term.