US dollar falls as US coronavirus cases jump by 62,000

The Japanese yen eased against the US dollar as traders reflected on the country’s machinery orders. Data from the statistics office showed that core machinery orders rose by 1.7% in May, which was better than the previous decline of 12%. Analysts were expecting the orders to have fallen by 5.4%. The orders declined by 16.3% on an annualised basis after falling by 17.7% in April. Other data from the Bank of Japan showed that foreign investors pulled ¥77 billion from Japanese stocks. This is after they pulled ¥494 billion in the previous month.

The US dollar index declined slightly as traders reflected on the sharp rise of coronavirus infections in the United States. The country confirmed more than 62,000 new infections, shattering Friday’s record of 55,562. This jump pushed the total national tally to more than 3 million. Also, the number of fatalities has been rising, with total deaths reaching 900 on Wednesday. These numbers came as the Trump administration continued to encourage states to reopen. In a statement, Mike Pence said that the country was starting to see initial indications of mitigation efforts. Trump has also encouraged schools to reopen.

The economic calendar will be relatively light today. In Germany, we will release the May trade numbers. Analysts expect the data to show that exports and imports rose by 13.8% and 12.0% respectively. That is after the 24% and 16.5% declines recorded in the previous month. In South Africa, we will receive the May gold production numbers. Meanwhile, in the United States, the Bureau of Labour Statistics (BLS) will release initial jobless claims data. Analysts expect that these numbers declined from the previous 1,427k to 1,375k. In Canada, we will get the housing starts numbers.

EUR/USD

The EUR/USD pair rose to an intraday high of 1.1352, which was the highest it has been since June 23. On the four-hour chart, the price is slightly above the short and medium moving averages. The current price is also an important resistance being the June 16, June 23, July 6, and July 7 highs. Also, it is above the 23.6% Fibonacci retracement. Therefore, a break above this resistance will signal that buyers have prevailed. That will push the price higher to the next resistance at 1.1422.

GBP/USD

The GBP/USD pair rose to an intraday high of 1.2625, which is the highest it has been since June 16. On the four-hour chart, the price is above the 50-day and 100-day EMAs while the parabolic SAR dots are below the price. The RSI has been rising and is slightly below the overbought level of 70. Also, it seems to be in the third phase of Elliot Wave. This means that the price may continue rallying as bulls target the next resistance at 1.2700.

XAG/USD

The XAG/USD pair rose to an intraday high of 18.72. On the four-hour chart, the price is above the short and medium-term moving averages while the RSI has moved nearer to the overbought level. Also, the signal and main line of the MACD have been moving higher. Therefore, the pair is likely to continue rising as bulls target the next important resistance at 19.00.