The USD/JPY has bounced back above our 1st tier downtrend and uptrend lines in reaction to a very negative Business Survey Index from Japan. The Survey indicates the Japanese economy continues to fall off a cliff, weakening relative to the U. S. economy.

As a result, America takes another step ahead in the battle of the comparative health of the two economies. Both Japan and America are implementing quantitative easing, though America's is more extreme in relation to GDP.

However, the USD/JPY is showing investors believe Japan may need to commit more funds to quantitative easing in order to counter the country's severe economic contraction.

The Cable is strengthening from our uptrend line as the Pound shows relative strength against both the Dollar and Euro after the EU released a highly negative Trade Balance.

However, the rally is stalling as investors await the speech from Geithner outlining America's plan to deal with the toxic assets on bank balance sheets. Regardless of the market reaction, the GBP/USD should hold up relatively well since no significant news will come from Britain until tomorrow's CPI release.

If the Cable should break above February 23 highs, we anticipate large near-term gains as the currency pair runs towards 2009 highs and the highly psychological 1.50 level.

The consolidation of the EUR/USD continues while the currency pair weakens Monday due to a much weaker than expected Trade Balance combined with a downward revision of the last release.

A declining Trade Balance reflects the weakness in Germany's production and manufacturing as exports decline and imports rise. Despite the seesaw behavior over the last few sessions, we anticipate the return to volatility shortly.

Last week's movement was historical and should result in refractions for the days/weeks ahead. Last week's flurry of news from the Federal Reserve greatly distracted investors from the underlying economic fundamentals. The distraction will continue today as Treasury Secretary Geithner reveals America's plan for dealing with toxic assets.

Gold failed to close above our near-term downtrend line on the 4-hour and are weakening back to the psychological $950/oz area as investors away in the U. S. government's plan to deal with toxic assets.

The correlation between gold and equities is a mess, and it will be interesting to see how the two interact in the near-term. Regardless, we're going to stick with the precedent that gold ultimately has a negative correlation with equities.

Crude futures are consolidating just above January 26 highs as investors await the market reaction to Treasury Geithner's speech. Now that we're past the March 15 OPEC meeting, crude will rely on U. S. equities and economic data for direction.

Furthermore, crude futures should exhibit a positive correlation with the EUR/USD and GBP/USD since the Dollar-based commodity becomes more a more desirable import globally as the Dollar weakens.

However, we must not forget crude oil inventories have risen three weeks in a row, and investors will not ignore this trend if it should continue.