The EUR/USD topped out at our 3rd tier uptrend line yesterday and is contracting quickly as U. S. equities look to open sharply lower for the second straight session.

Lacking economically fundamental reasons for dropping, the EUR/USD is reacting to psychological blows dealt by George Soros and the IMF. Yesterday Soros reiterated his skepticism regarding the solvency of U. S. banks, and the IMF is rumored to announce it predicts that U. S. financials are exposed to over $3 trillion worth of toxic assets.

Additionally, the EUR/USD was already in a comparatively weak position against the Dollar as compared to most other major pairs due to the uncertainty regarding future ECB monetary policy.

Gold finally found bottom yesterday, gaining on the weakness in U. S. equities. However, the rise is insignificant thus far compared to the fundamental losses experienced over the last few sessions.

The backbone of the uptrend was broken with the passing of our 1st tier downtrend line and the highly psychological $900/oz. The fundamentally weak position of gold is a positive sign for equities unless we are heading for all-around deflation as we experienced during the height of the economic crisis.

That being said, we have little reason to be positive on gold trend wise. However, we wouldn't be surprised to see some near-term gains in the precious metal due to oversold conditions and the current weakness in the S&P futures.

The selloff in crude has really gained traction, dropping below our previous 1st tier uptrend line and the highly psychological $50/bbl level. Crude futures failed to close above our 1st tier downtrend line on the 4-hour yesterday.

Crude is stepping in line with U. S. equities as economist heavy weights publicly question the validity of the near-term uptrend in U. S. equities. We haven't seen any concrete economic fundamentals to justify the present pullback due to the lack of data releases.

The 30 Year T-Bond futures have failed to climb back above our downtrend line and March 26 lows despite weakness in U. S. equities. Therefore, the 30 Year futures could be transmitting the same message as gold in that the present selloff in U. S. equities is only temporary.

On the other hand, the selloff in the 30 Year futures could be disconcerting in the fact that the movement represents disinterest in the massive treasury auctions taking place to fund America's economic initiatives.

As a result, the downward movement in the 30 Year futures could indicate an insufficient impact from the Fed's use of quantitative easing due to booming supply and waning demand.

Rate pressures up to within striking distance of 1.5000 overnight; likely offers will be thick on any further advance. Aggressive traders can look to lighten up on longs above
1.4950 area. Stops noted above the 1.4880 area on the way up with traders noting stops under there on the way down.

Rate makes lows after the fix but holds support to bounce back onto the 1.4700 handle. Traders note support is likely firm at the 1.4450 area as expected; offers ahead of 1.4700 easily absorbed keeping the bias to the upside. Close over 1.4900 argues for further gains but tech resistance is firm ahead of 1.5000.