- USD/CNH pulls back from the multi-day low.
- Coronavirus fears recede from China but the US becomes a global hotspot.
- Mild risk-off triggers the US dollar recovery despite the Easter Monday holidays.
Despite witnessing recent pullbacks from 7.0610, USD/CNH stays 0.18% positive while flashing 1.0565 as a quote amid the early Monday. While receding risk of the coronavirus (COVID-19) in China seems to weigh on the pair, the recent surge in the US virus numbers keeps the buyers hopeful. It should, however, be noted that the market remains less active due to the Easter Monday holidays in major economies, except in Japan and China.
As per the latest data from China’s Hubei, there are 98 new imported coronavirus cases in Mainland as of end-April 12 versus 97 a day earlier. However, China’s Hubei province reports zero new coronavirus cases as of end-April 12 vs none a day earlier.
On the other hand, there are more than 20,000 deaths and 530,000 infections in the US that makes the world’s largest economy as the global hotspot, while also crossing Italy.
Even if China’s economic conditions, as per the latest PMI data, are on recovery mode, the widespread outbreak of the pandemic in the world’s largest economy seems to weigh on the risk-tone.
As a result, the US stock futures register losses nearly 1.5% whereas shares in Taiwan and Shanghai are mildly lower too.
Moving on, a lack of major data/events will keep traders looking for virus updates for fresh impetus.
Technical analysis
While a 21-day SMA level of 7.0870 restricts the pair’s immediate upside, fresh selling is expected to take place below 7.030 figures comprising 50-day SMA.
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