USD / CAD Price Analysis: As US Inflation decelerates, the recovery move to around 1.3700 appears vulnerable

After falling to roughly 1.3650, the USD / CAD pair has made a less assured rebound move. A deceleration in U.S. inflation suggests a further decline in demand for safe-haven assets in the wake of the Silicon Valley Bank (SVB) failure, which puts the Loonie asset in jeopardy near 1.3700.

As reported by CNBC, Moody's Investors Service has lowered its outlook on the entire banking system from stable to negative, which has led to some losses in the early Asian session for the S&P500 futures. The situation depicts a slight pessimism in the overall risk-taking disposition.

The Federal Reserve (Fed) will likely continue to raise interest rates at a slower rate as US inflation continues to decline. Jerome Powell, the chairman of the Fed, should not be in a rush to tighten monetary policy further, as US inflation is falling in line with expectations.

USD / CAD has recovered after perceiving a cushion near the horizontal support drawn from the high on March 1 at 1.3659 on a two-hour scale. The US Dollar's recovery move lacks conviction and strength, which increases the likelihood of further losses in the asset.

The 20-period Exponential Moving Average (EMA) at 1.3710 may continue to act as a barrier for the US Dollar.

In the meantime, the Relative Strength Index (RSI) (14) has protected the decline into the pessimistic zone between 20.00 and 40.00. Nonetheless, the adverse bias is still present.

A decisive breach of the low of March 14 at 1.3652 would draw the currency toward the low of March 07 at 1.3600, followed by the low of March 03 at 1.3555.

In an alternative scenario, a confident recovery above the high of March 14 at 1.3750 would propel the major toward the highs of March 13 above 1.3800 and March 09 at 1.3835.