Societe Generale strategists highlight that USD/CAD is tactically expensive versus the 2-year spread and has recently met resistance near 1.4250 before retracing toward 1.4130. They view this area as potential support but warn that a break lower could trigger a deeper pullback toward 1.4075 and the 50-DMA near 1.3950, framing near-term downside risks for the pair.

Key support eyed near 1.4130

"USD/CAD encountered interim resistance around 1.4250 last month and has since retraced toward the upper boundary of its previous broad consolidation range near 1.4130, which could serve as a potential support."

"It will be interesting to observe whether the pair can hold above this support."

"Should a break below 1.4130 materialize, USD/CAD may embark on a deeper pullback."

"The next objectives could be located at projections of 1.4075, followed by the 50-DMA near 1.3950."

"USD/CAD expensive based on 2y spread"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)