Led by the release of the Japanese Tankan this morning, the market’s next direction of trade will have plenty of data points to take cues from. PMI’s from China , the EU and the US later today and also the US payrolls at the week’s end will offer traders more clues as to new directions they should take as this second quarter kicks off. The Japanese Tankan or quarterly business sentiment survey for Big Manufacturers came in lighter than expected with a reading of 12 versus estimates of 14. However the similar reading for non- manufacturers came in with a positive beat of 19 versus an estimate of 17. The Yen firmed slightly versus the USD after this morning’s release, trading to the 119.4 level. Looking at the charts below, the USDJPY have settled within the 116 to 122 band for the last 4 months, consolidating after its huge move from the 103 levels as recently as August last year. Wheather the JPY is able to break above or below this established band may now have to be motivated from policy moves from the USD instead. The China A50 pulled back sharply yesterday losing as much as 4%. However, when reflected against it’s almost 20% drive up from early March, it actually represents a healthy consolidation. 11900 is now a first support followed by the 11480 levels. Also 12400 is now the first resistance. Crude, will also take direction from many of the ‘demand’ indicators out his week. Continuing concerns over the conflict in Yemen, together with domestic tension in Nigeria-one of the OPEC largest producers of oil- and the increasing confusion over the nuclear accord with Iran may have a bearing on the supply side fears.
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