The USD is higher this morning after a slow start on the defense in Asia, the majors making the best levels of the day ahead of European trade. The Greenback is making fresh highs against the majors in early New York as technical trade and cross spreaders pressure to the upside.

Overnight equities markets were lower adding to the upside as well. The big mover this morning is GBP dropping through several levels of technical support finding stops layered underneath recent lows as EURO/GBP traders sell the GBP side of the cross. Stops under 1.4050 and 1.4000 area gave way to a test of the 1.3950 area and stops were larger on the dip traders say suggesting that lots of bulls came to the table near the 1.4000 area last week.

Rate follows-on lower on stops under the 1.4050 area in size, cross-spreaders selling the GBP side of the spreads. Buy point around 1.4000 area in my view.

Reversal off weekly highs a negative technical; is it a bear trap? Likely an upside rally is still in the works but the rate needs to hold the 1.4000 area with some confidence early this week. Middle East names likely on the bid on this dip but no confirm yet. Traders report stops in-range adding for two-way action.

Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above and the 1.5000 handle is a big psychological number. 23 year lows are very likely to hold on any break with initial support now at 1.3900 in play.

Rate follows GBP in two-way action, holding support now at 1.2550 area once again. Aggressive traders can add to open longs on this dip.

Cross-spreaders supporting rate as GBP drops. Stops building on both sides as the rate tests for stops on the downside first. Upside stops likely building in the 1.2630/50 area again, overhead resistance at 1.2720 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week.

The S&P futures got slammed again yesterday with negative news coming from all directions.Moody's cut its debt rating on JPMorgan and is considering doing the same for Bank of America and Wells Fargo.

The news sent financials tumbling and brought the rest of the market along for the ride. It's hard to miss the fact Citigroup trading under $1/share on Thursday, creating an incredibly negative psychological impact on equity markets.

Furthermore, GM dropped below $2/share, making the company's sustainability doubtful. Investor uncertainty is rampant, and there is no bottom in sight at this point.

The 30 Year T-Bond futures surged on Thursday with the S&P futures continuing their freefall.

Despite the rising supply of long-term treasury bonds in order to raise capital for the government's large stimulus plan, the negative correlation between bonds and equities has been reactivated.

The 30 Year T-Bond futures rose well above all of our previous resistances are approaching our uptrend line with the downtrend lines fading into the distance.

We expect the continuation of sizeable near-term gains should the 30 Year futures climb above February highs.

Crude futures recovered from their losses on Thursday despite another day of crashing U. S. equities. With U. S. inventories declining and investors expecting increasing supply cuts coming from OPEC on March 15th, crude is finding considerable strengthen despite the economic turmoil in America.

Furthermore, China continues to build their stockpiles of crude, taking advantage of what the government views as bargain prices for the essential commodity.

However, U. S. unemployment is rising at a hurried pace while the economy deteriorates, placing a downward pressure on crude that is preventing it from breaking out to huge gains.