COVID-19: number of cases is close to a million

The coronavirus continues to spread around the world: the number of infected people are growing, and so is the number of deaths. At the moment, the virus has not been detected in Antarctica, although a strict quarantine regime has been introduced at polar stations. At the same time, the market has ceased to react sharply to daily reports from the front of the fight against the pandemic. For almost three weeks, global markets have been in a zone of severe turbulence amid the aggressive spread of Covid-19. The situation really developed (and is developing) at a kaleidoscopic speed: it took 67 days to infect 100,000 people, 11 days for 200,000, four days for 300,000, only 2.5 days for 400,000, and less than one day for half a million. To date, this figure is actively approaching a million: at the time of writing, the number of cases of coronavirus is 937,567 people.

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Despite this dynamic, the currency market shows relative stability. At least the updated data no longer shocks traders and does not provoke strong volatility. The market's focus has shifted to other fundamental factors, which, however, are also related to the pandemic. We are talking about the reaction of the world's leading countries, as well as the G20. For example, at the end of March, it became known that the G20 countries will take collective measures to support the world economy – they will invest five trillion dollars in the fight against coronavirus. This news had a positive impact on the mood of traders, and the foreign exchange market increased risk appetite, despite the active spread of Covid-19. Local measures have a local impact on individual currency pairs. In particular, the allocation of $2 trillion to support the US economy provided support to dollar bulls. While the EU countries have not yet been able to come to a similar decision, as a result of which the European currency has fallen in price throughout the market.

In other words, no matter how cynical it sounds, the market is used to the sad statistics that indicate an increase in Covid-19 cases and deaths from this virus. At the same time, traders usually react sharply to any statistical spikes that are out of the general canvas of reports. For example, today the world has recorded a sharp increase in mortality from Covid-19. In particular, in the United States, more than 912 people died from coronavirus during the day. The highest death rate in New York city (1,139 people). The second largest number of deaths is the state of the same name (579 cases). This is the largest daily number of victims of the pandemic in the world. According to the estimates of the administration of Donald Trump, in the worst case scenario, the total number of deaths may exceed 2,200,000. According to the White House, the quarantine will reduce the death rate to 100-240,000 Americans. At the moment, almost 190 thousand people are sick in the country (although the first thousand infected in the United States were reported only five days ago), the victims of the pandemic were 3,900 Americans.

Naturally, no one speaks of any ease of restrictive measures, although at the end of March, Trump announced that "the medicine can be worse than the disease," referring to the negative impact of quarantine on the country's economy. He then promised to restore business activity in the country by Easter on April 12, but then he nevertheless announced the extension of anti-epidemic measures until the end of the month. A sharp increase in fatalities from Covid-19 is recorded in Britain. Over the past day 563 people died from the disease in the country. During the pandemic, almost 30,000 people fell ill on the islands, 2,352 of them died. In France, 509 people have died from coronavirus in the last few days. Moreover, the number of patients in intensive care exceeded 6,000. The situation in Italy and Germany remains grave.

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Thus, already in the next few hours, the overall Covid-19 case rate can exceed the millionth mark. This fact may have a certain impact on the dynamics of defensive assets. And if the US currency, in anticipation of Nonfarms, now demonstrates uncertainty (the dollar index fluctuates in the flat for the second day), then the yen may well "pick up the banner" and act as the main defensive tool.

The USD/JPY pair sharply fell after the general greenback weakened - the price collapsed in just two days by 400 points. But then it got stuck at the boundary of 106-107 figures. Nevertheless, the bears demonstrate a certain perseverance: the price has overcome the support level of 107.50 (the middle line of the Bollinger Bands indicator on the daily chart) while the next support level is located at 106.40 (the Kijun-sen line on the same timeframe) is the goal of the downward movement in the medium term. Strengthening anti-risk sentiment will allow the bears to test this price target by the end of this week, especially if Nonfarms disappoint dollar bulls.

The material has been provided by InstaForex Company - www.instaforex.com