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The U.S. dollar has strengthened against all higher yielding currencies on the fear of a global health pandemic. A respiratory disease known as the swine flu is spreading across the globe.

The EUR/USD was lower by more than 100 points at the start of the week’s trade today, as fear of a spreading swine flu epidemic gripped global capital markets. Centered in Mexico, the swine flu outbreak has managed to kill more than 80 people, but the latest cases in US and Canada have not resulted in any further fatalities so far. Human to human infection of swine flu is spread through touch and sneezing and is treatable with antibiotics. Investors in Asia, still haunted by memories of SARS outbreak in 2003 were quick to react, selling high beta currencies while seeking refuge in the dollar and the yen.

The Bank of Japan leaves the overnight call rate unchanged at .10%. Jpy firmed up a bit  trading down to 94.10 against the USD with traders citing some support at 94.00 level. It seems traders are waiting for Shirakawa’s 2:00…

The Japanese Finance Minister ahead of the Nikkei open said that the BOJ has no plans of intervening in the foreign exchange market and that he does not fully understand why the Yen has had such a strong bid.

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After breaking of the descending channel, the Euro/Dollar reached the target 1.3914, and continued rising, close to the the resistance at 1.3960. Short term signals are rising, while neutral in the medium term. Next target upwards is 1.4075, but we may first see a slight downward correction of the general…

The Philadelphia Fed Governor Plosser has the following comments:

• Central Bank needs explicit inflation target.
• Sees rising risk of US inflation over the medium and long term.
• Sees evidence of severity of recession dissipating.
• Current conditions reminiscent of the 70’s.
• Downturn in consumer spending not…

The recent consolidation does make things look more clouded but considering the bearish divergences and the need to see a deeper pullback before moving to the eventual 0.80 target I feel today should prove to be a down day. There is resistance between 0.7819-37 and I look for this to…

EUR/USD closed higher due to short covering on Thursday as it extends yesterday’s high range. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving…

The Bank of Japan decided by a unanimous vote to maintain the Overnight Call Rate at 0.10%. ‘Having the lowest rate amid industrialized countries, economists argued that the low interest rate will not provide strong enough relief to the Japanese economy, and that the central bank has mostly depleted its…

EUR/USD Today’s support: – 1.3857, 1.3812 and 1.3770(main), where correction is possible. Break would give 1.3735, where correction also may be. Then follows 1.3719. Break of the latter would result in 1.3690. If a strong impulse, we would see 1.3664. Continuation will give 1.3645.