Rate holds gains and makes new high overnight; stops seen above weekly highs around the 1.4050 area. Tests support on pullback and holds for now. Lows likely remain secure. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group.

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 long-term support at 1.3500 area now in play.

The USD/JPY continues its movement sideways, building up a solid base in the meantime.  Investors are still contemplating whether to catapult the currency pair above 100, which would signify a psychologically important move for the Dollar.

Seeing as U.S. equities continue to strengthen as the Japanese economy weakens, there are growing incentives to follow through with the fundamental move.

However, investors will still wait for a statement move from the S&P futures showing the present rally has legs.  If the S&P futures can plow through key resistances, the USD/JPY should follow suit.

The Cable is strengthening Monday after Barclay’s said its operations continue to outperform.  The UK bank’s shares soared 22% during the European trading session.

Additionally, the Cable is finding encouragement in the EU’s stable CPI report coupled with its positive correlation with U.S. equities.  The S&P futures are pointing towards another positive open for the U.S. equity markets.

However, the GBP/USD is experiencing some profit-taking right now as it encounters March highs and the dense trading range dating back to late January.  We won’t see any economic data from Britain until Wednesday. 

The EUR/USD is flying after the EU reported a Core CPI one basis point better than expectations. A stabilizing CPI indicates future growth in business revenue and consequently a stronger Euro.

Consequently, if additional EU data confirms this trend then the ECB may be able to avoid lowering its benchmark rate further. However, we must not forget the ugly economic data released from Germany last week, which raises a cautionary flag to the wind.

ECB President Trichet addresses the public today, and all ears will be keen to decipher his language concerning upcoming monetary policy decisions. Meanwhile, the EUR/USD is putting on an impressive show, pushing through our 2nd and 3rd uptrend lines in a single swoop.

Crude futures have sold off sharply after OPEC decided to keep production levels unchanged. Investors were anticipating another supply shock, so the price of crude is paying for the inaction on Monday.

Obama put in a call to the Saudis a week ago, imploring OPEC's most influential country to keep production stable to avoid strangling a limping global economy. The Saudis took notice, and production should remain unchanged until they next meeting in May. The futures are currently finding stability along our uptrend lines, showing there is hope for the uptrend.