Not much has changed in the USD/JPY with the consolidation process dragging on. The sideways movement of the USD/JPY over the last three weeks signifies the relevance of the psychological 100 level. Investors are still reluctant to test it, indicating they haven't bought into a bottom in U. S. equities yet.

While the Japanese economy is incredibly weak, America's certainly isn't putting on a stellar performance. Therefore, if the U. S. economy continues to shell out more negative economic data the USD/JPY should continue its consolidation or possibly make a large movement south.

Rate two-way, holds gains and has inside range day overnight; stops seen above weekly highs around the 1.4250 area. Tests support on pullback and holds for now. Lows likely remain secure.

The USD continued to consolidate today reaching highs against the majors in early New York but failing to advance into key bullish levels. The majors recovered after the London fix rising off lows and in some pairs flirting with highs into the close. Today's PPI and Housing Data was benign helping to underpin the possibility that inflation is not a problem and housing is beginning to recover but more data will be needed according to most analysts. Aggressive traders are suggesting that a positive response for Wall Street today signals that investor confidence is beginning to turn positive from neutral or negative.

The EUR/USD recovered from intraday losses yesterday after balancing along our 1.2971 support. The relative strength of the Euro is reflected in the EUR/GBP and came despite a late selloff in the U. S. equity markets.

Investors took kindly to the public address by the ECB yesterday. The ECB explained there is little room for further interest rate reductions, implying the central bank may cut one more time and keep the benchmark rate steady.

However, the wording is not definite and gives the ECB leverage to alter their monetary stance if deemed necessary. The EUR/USD also found strength in the fact that the IMF aims to double its account balance to aid emerging economies.

The Cable continues its downturn after the S&P experienced a late-session tumble. However, the GBP/USD is finding support on our 2nd tier downtrend line and the key psychological 1.40 level.

Given that Britain won't release any noteworthy economic data until tomorrow, we expect the Cable to rely on its positive correlation with U. S. equities until then.

Therefore, the GBP/USD is presently implying the currency pair is waiting to see if the selloff in U. S. equities yesterday carries over into today's trading session. Meanwhile, the U. S. will release Building Permits, Housing Starts, and PPI this morning, which will surely be market movers.