The Yen is strengthening slightly against the Dollar again, but the USD/JPY is presently finding strength in our 1st tier uptrend line. Weakness in the USD/JPY reflects the selloff taking place on Wall Street premarket Monday morning.

With the bad news from Japan out of the way, the focus turns towards U. S. equities and corporate earnings, so the USD/JPY should exhibit a positive correlation with the S&P futures for the time being. As we stated previously, the USD/JPY's uptrend is young and fragile.

The Cable is getting clobbered after the CBI stated Britain's economic growth could be worse than forecasted. Furthermore, the CBI is urging its Chancellor not to commit more funds to economic stimulus and quantitative easing in the upcoming budget.

While one would like to believe the ease of quantitative easing would have a positive impact on the Pound, the opposite is occurring. The Cable's contraction in response to the news shows investors believe the CBI's reluctance to encourage further use of liquidity to fight the economic downturn could do more harm than good to Britain's economy.

The EUR/USD has really deteriorated since Friday after falling below previous April lows. The EUR/USD fell into a rapid decline from here, and is presently trading back below the highly psychological 1.30 level.

Though 1.30 has been broken, we wouldn't be surprised to see some support around this area as investors take advantage of oversold conditions and hesitate leaving
1.30 behind. Serious damage has been inflicted upon the Euro in reaction to dissent among the ECB.