No, you cannot swap the granulated sugar for powdered sugar in this recipe. When granulated sugar is blitzed in the food processor, it becomes superfine sugar. While much finer than granulated sugar, superfine sugar is not powdery like powdered sugar.  Caster sugar (superfine sugar) can be used instead of granulated sugar, but I do recommend still pulsing it a few times in a food processor in case any granules are larger or stuck together.