The rally in the 30 Year T-Bond futures faded yesterday after the U.S. released better than expected housing and manufacturing data, sending equities higher and treasury futures lower. 

The EUR/USD has pushed through March 30 highs, rallying before the ECB announces its monetary policy decision. While the 50 basis point cut analyst expect is likely, investors will be more interested in what Claude Trichet has to say about the ECB's potential use of quantitative easing.

Trichet will likely say the ECB doesn't need to cut the benchmark rate further. However, this is what the ECB has said after each of their other rate reductions.

As a result of investor apprehension, the EUR/USD is showing limited gains as compared to other major Dollar pairs such as the GBP/USD and AUD/USD. Nevertheless, the EUR/USD will likely follow its positive correlation with U. S. equities.

The GBP/USD catapulted after rising above our 2nd tier uptrend line, surging well beyond the psychological 1.45 barrier. In fact, the Cable peaked past our 3rd tier trend line before retreating as investors take profits before challenging March highs.

Britain continues to receive good economic data including yesterdays Manufacturing PMI and today's Construction PMI and Nationwide HPI numbers.

In other words, the manufacturing and construction industries are looking up in Britain while home prices are actually on the rise.

The USD/JPY is so close to breaking out February highs investors can taste it. The long-fought battle may come to a conclusion today. The USD/JPY is finally building up some nice momentum, albeit slow.

The significance of these levels is displayed by the heavy consolidation taking place over the last 4 or 5 weeks. The currency pair is strengthening from our 2rd tier downtrend line with confidence.

However, before we get ahead of ourselves, we need to keep in mind the USD/JPY has given several head fakes in its return to 100. Investors are still hesitating sending the USD/JPY much higher because it would likely imply large near-term gains.