The Cable is weakening below our uptrend line while approaching the psychological 1.45 cushion. The Dollar is experiencing relative strength against the Pound due to the combination of yesterday's better than expected economic data from the U. S. combined with much weaker than expected Retail Sales from Britain today.

In a nutshell, this week's data reveals that inflation is rising rapidly in Britain while consumption slows. Meanwhile, both America's and Britain's central banks have lowered their benchmark rates to record lows while implementing quantitative easing.

The EUR/USD popped up yesterday after Timothy Geithner admitted that there may be a better international currency reserve than the U. S. Dollar.

However, Geithner later clarified that he believes the U. S. Dollar will continue to play a key role in international reserves and transactions. The stability of the U. S. Dollar has been thrown into doubt in the face of historical governmental spending and the Federal Reserve's planned use of quantitative easing.

Analysts are anticipating massive inflation in the U. S., or an extreme depreciation of the Dollar against major currency pairs. Therefore, governments are voicing their opinion concerning the domination of the U. S. Dollar before the G20 summit.

Crude futures strengthened from our bottom-end support yesterday despite higher than expected Crude Oil Inventories for the fourth straight week.

Despite the concerning increase in supply, crude is finding comfort in better than expected economic data from the U. S. coupled with depreciation of the Dollar.

Consequently, analysts are expecting rampant inflation in America. Improving economic data is encouraging to investors because it sparks the hope that production can pick up along with the consumption of crude.

Furthermore, a depreciating Dollar makes Dollar-denominated commodities such as crude more attractive for international consumption.

Gold recovered well from our 1st tier uptrend line after Treasury Secretary Geithner alluded to the fact the U. S. would not be opposed to migrating from using the Dollar as the standard international currency.

Consequently, gold flexed its negative correlation with the Dollar, which is interesting because U. S. equities have been positively correlated with the EUR/USD, GBP/USD and USD/JPY throughout the heat of the crisis.

Such movements indicate that the correlations may be shifting between U. S. equities and the major Dollar pairs.

However, this is merely a hypothesis based on observation and will need to be clarified further. What we can say is that the uptrend for Gold has been rescued for now.

Rate dips on news, clears stops under 1.3450/60 and sovereign bids seen into the lows. Rate makes highs in NY after the news suggesting the rate is attractive on dips and shorts are weak. Action remains two-way; is not advancing as aggressively yet. Stops likely building above the 1.3740 area.

Rate two-way and violent, likely stops under 1.4600 area cleared with bids around 1.4550 taking the other side. Lows late in the day argue that the toolbox signal valid; aggressive traders could lighten up on longs near-term. Traders report large names on the dip and the rate is likely to follow EURO higher if EURO can rally.