USD/CAD has bounced off the lower boundary of its multi-year uptrend channel at 1.3535, with positive MACD divergence signaling fading downside momentum. While this opens the door to consolidation or a retest of 1.3800, a decisive break below 1.3535 would threaten a deeper decline, Société Générale's FX analysts note.

Watch 1.3800 for next upside test

"USD/CAD reached the lower boundary of the up-sloping channel drawn since 2021, at 1.3535, triggering a brief upward move. Positive divergence on the daily MACD indicates downward momentum is gradually receding."

"While this is not a reversal signal, it denotes possibility of a consolidation. A retest of recent pivot high at 1.3800 cannot be ruled out. Cross above this can lead to a larger bounce. However, there will be a risk of deeper downtrend if the pair breaches 1.3535."