The Cable is logging some healthy gains after the BOE cut its benchmark rate to record low of 0.50%. The Cable is rising above our 2nd tier downtrend line ahead of the U. S. Unemployment Rate. Despite the progress made in the GBP/USD over the last 24 hours, the debilitating medium-term downtrend line remains intact.

What we are likely seeing here is a situation of oversold conditions and buying on the news. Furthermore, Britain released a better than expected PPI Input number this morning, showing an encouraging rise in inflation.

The USD/JPY continues its retraction from weekly highs as the U. S. economy stumbles. Even though the Japanese economy is in bad shape, the U. S. doesn't seem too far off.

Therefore, the investors are questioning the U. S. as a safe haven currency all around the FX markets in the last 24 hours.

Therefore, the medium-term downtrend remains largely intact. With our 3rd tier downtrend and the psychological 100 mark hanging over head, the USD/JPY has its work cut out for it to the topside.

Investors will of course be keeping a close eye on the Unemployment Rate coming from the U. S. this morning. If the number is disappointing and U. S. equities tumble, the USD/JPY should follow suit.

Gold dipped yesterday, yet found strength in the highly psychological $900/oz level. The precious metal is rising as U. S. equities look to open in the red Thursday morning. Hence, we could see a return to the negative correlation between gold and equities today with a bounce in gold long overdue.

Though we are positive on gold in the near-term, the precious metal needs to deal with our 2nd tier uptrend line before it can log any sizeable gains. Volatility has decreased over the last couple sessions, showing investors aren't quite sure whether to continue the uptrend or send gold tumbling into the black hole.

The 30 Year T-Bond futures manage to stay above February lows yesterday and are strengthening Thursday morning as U. S. equities look to open the session lower. Surprisingly, the 30 Year futures remained afloat on Wednesday despite surging equities.

One may have expected the opposite considering the usual negative correlation between the two investment vehicles. Hence, the 30 Year futures may be oversold, and are consequently due for a near-term rally.

Therefore, we are positive on the 30 Year right now with a possible retest of our 2nd tier downtrend line. On the flipside, if the futures do in fact drop beneath February lows, we anticipate a heightened near-term selloff.

The S&P futures posted solid gains yesterday after the government unleashed details of its housing rescue plan and Obama called stocks a good buy. However, investors had little to cheer about data-wise with the ADP Non-Farm Employment change number coming in much lower than expected. Although the ISM Non-Manufacturing PMI was slightly better than expectated, the number was below that of the previous release and still signals economic contraction. Hence, the rally in the S&P futures faded, and the U. S. markets are looking to open lower Thursday morning.

The USD/JPY balanced along our 2nd tier downtrend line, and is surging again to the upside looking to retest the highly psychological 100 area.  The move comes as the S&P futures try to stabilize at 700 ahead of heavily-weighted economic data.

Japan will release its Capital Spending number tonight with analysts expecting a decrease of -15.6%.  If capital expenditure decreases more than expected, signaling lower production, and U.S. economic data comes in line then we could easily see a retest of 100. 

With the Carry Trade unwound, investors are now judging the currency based on the comparative economic health of the two nations.  With Japan faring worse the America, the USD/JPY continues its impressive rally.