Gold is stabilizing and recovering from its slight downward movement on Friday despite equities edging up in pre-market. The main test for the precious metal will be March highs and our 3rd tier uptrend line. If Gold can't rise above these levels soon, then the downtrend could take hold again.

If the precious metal can close comfortably above March highs, we anticipate large near-term gains. It will be interesting to see how Gold's negative correlation with equities plays out in the coming week.

The stabilization and hesitation of Gold to break downwards could be hinting at an upcoming selloff in the S&P futures. However, the precious metal hasn't committed to a near-term direction yet, so we will stick with a wait and see approach.

The 30 Year T-Bond futures are experiencing profit-taking Monday with a trend line inflection point approaching today. Therefore, we should witness some heightened volatility to kick off the weekend. The 30 Year futures are weakening in reaction to the realization China is slowly diversifying its foreign exchange reserves in an effort to reduce exposure to U. S. debt.

As a result, price is declining and interest rates rising in an effort to attract more investors to the escalating level of U. S. bond issuance. Nevertheless, the 30 Year futures remain wedged between the trading range from early February.

The S&P futures bounced around on Friday to end the session with slight gains after the U. S. reported slightly better than expected Trade Balance and Consumer Sentiment data. Even though the numbers beat expectations, the data is still dismal and indicates heavy economic contraction.

The U. S. will release some more significant monthly data this week, highlighted by Building Permits and PPI on Tuesday followed by CPI on Wednesday. Investors are becoming increasingly concerned about the level of prices in the U. S. economy. A worst case scenario would show excessive growth of producer prices coupled with dropping consumer prices, raising cost and lowering revenue.

As anticipated, the USD/JPY continued its consolidation as investors contemplate a retest of the highly psychological 100 level.  The movement of the USD/JPY will likely depend on whether U.S. equities can prove this is more than a bear market rally.

Meanwhile, our 3rd tier downtrend line is creeping towards present price, so the USD/JPY will have to make up its mind soon.  The near-term trend of the USD/JPY hangs in the balance, and we would not be surprised to see the currency pair wake from its slumber either today or the beginning of next week.

The Cable also followed U. S. equities higher, propelling from our 1st tier downtrend line and back above the psychological 1.40 area. However, the GBP/USD is backing away from our 2nd tier downtrend line as we speak, showing hesitation as investors await the S&P's next move.

The Cable has climbed back into the bottom of the February trading range, a positive development for the currency pair. We anticipate some consolidation from the GBP/USD today with no economic data releases from Britain. Additionally, we anticipate a near-term struggle with 1.40 and our 2nd tier downtrend line.

The EUR/USD logged some impressive gains on Thursday, and is inching above our 2nd tier downtrend line on Friday.  The EUR/USD exercised its positive correlation with U.S. equities, ignoring the extremely negative industrial production data from Germany.

However, we expect some near-term profit taking coming up as the currency pair struggles with our 2nd tier and the highly psychological 1.30 level.  The EUR/USD still faces February highs with EU retail sales release pending.