FOREX INTRADAY SNAPSHOT

EUR/USD
The powerful uptrend remains intact, and further gains above Monday's current session high at 1.4200 are expected. The Nov. 4 reaction high at 1.4283 is the main target, which is straddled by two 1.618 Fibonacci extension targets. Corrective weakness will attract support while above 1.4115, and solid support at 1.4050 provides backup.

GBP/USD
The recovery extends to put key resistance in the 1.6277 area under threat. This rally off 1.5978 is forming the right-hand shoulder of a head-and-shoulders top formation, which suggests a peak in the 1.6277 area should be expected. Projected support at 1.6130 needs to be broken in order to attract further weakness towards 1.6061 and the March 15 reaction low at 1.5978. A clean break through 1.6277 would question the six-week uptrend reversal pattern, and open the March 2 reaction high at 1.6344 again.

USD/JPY
The setback off 82.00 is likely to attract fresh pressure on support at 80.52. The dominant bear trend is likely to test the 79.75 area, although there is scope for 79.17 before the likelihood of finding a near-term base. Regaining ground above 81.26 is required to open the 82.00 high again.

AUD/USD
The recovery is expected to extend to the 1.618 Fibonacci target at 1.0057 at least, as bulls look to regain a foothold above parity. A clean break through 1.0057 would bring the focus on to the March 11 high at 1.0160, and strengthen the March 17 reaction low at 0.9705 in the process. Good support lies in the 0.9875/0.9905 area, which is protected by 0.9941.

FOREX FOCUS
China's policy moves are often unpredictable and Friday's decision to raise its bank reserve requirement ratio was no different. Coming only hours after the Group of Seven leading industrial nations had launched a historic coordinated exercise to weaken the yen and help Japan recover from last week's catastrophic earthquake, the announcement triggered a stream of speculation over China's intentions. China does have form in this department. Last year, it chose to raise rates for the first time in about three years soon after Japan had launched its own massive intervention to drive the yen lower. The exercise wasn't particularly successful, but China was soon at it again--raising interest rates when most of the rest of the world was out celebrating Christmas Day. Certainly, the move by G-7 to weaken the yen will not have been popular in Beijing, which has been keeping a very careful cap on the strength of its own currency, the yuan, to keep it competitive. Also, with vast holdings of Japanese government bonds, picked up when it was diversifying its foreign-exchange reserves in the last year or two, the last thing the People's Bank of China wants is a weak yen. However, there is no obvious reason why a move to make bank lending in China more difficult, and thus slow economic activity, would in any way offset a more competitive yen.

EUROPE
The euro was a touch lower in European trading Monday but well supported above the $1.41 level against the dollar as the European Central Bank is thought to be on track to lift interest rates despite the ongoing troubles in Japan and the Middle East. Bombing by allied forces in Libya and protests in Bahrain have propelled oil prices higher and put worries about spiralling inflation levels back at the top of the agenda. But investors' willingness to embark on relatively risky bets, and to buy relatively high-risk currencies, is undimmed. That is supporting the euro and the Australian dollar, for example, while it dents currencies seen as safe retreats, like the yen and the Swiss franc. In all, the market is dominated by a significantly calmer tone than has been seen over the past week or so, particularly when compared to frantic trading conditions as the Group of Seven largest industrialized nations launched its rare coordinated action to weaken and stabilize the yen last Friday. "The two dollar spike in oil is capturing attention but otherwise there is some calm overall," said Simon Derrick, currency strategist at Bank of New York Mellon.

ASIA
Japanese markets are closed for Vernal Equinox Day.

WORLD
The Federal Reserve intervened in the currency market Friday, buying dollars and selling yen as part of a coordinated effort by Group of Seven nations to weaken Japan's currency. It was the first coordinated currency intervention since 2000 and started overnight in Tokyo when the Bank of Japan initiated a promised "battle" against currency speculators by the Ministry of Finance. The Bank of England, Bundesbank, Banque de France and Bank of Italy all then intervened during European trading, and the Bank of Canada also acted.
Nomura Securities estimated Y2 trillion for the BOJ intervention and another $5 billion across Europe. Those coordinated efforts helped send the dollar shooting up as high as Y82 from Y78.93 late Thursday in New York. The initial intervention from the Fed came right at 8 a.m. EDT, the start of the New York trading day. Traders in New York estimated that orders were placed in mostly $50 million blocks with multiple banks and that the Fed likely traded about $600 million. The intervention showed the world's central banks stood with the BOJ in a coordinated effort to push back against speculators who had ridden down the dollar against the yen to record levels early Thursday. The strength of the yen has been a long-time problem for Japanese officials even before this week, as it makes it difficult for its high-tech and auto components export-driven economy to compete in the global market. Japan's strong currency has contributed to deflationary conditions which have proven hard to shake for the world's third-largest economy