It had to happen sometime and it looks like this week could be the week that the DAX’s record breaking run of gains looks set to come to an end. After 10 successive weekly gains the German benchmark looks set to post its first negative week since the first week of January. A combination of concerns about a slowing US economy, a looming deadline for Greece, and another flash point in the Middle East, in the form of Yemen, appears to have prompted a bout of profit taking across European markets, while US markets have struggled to push on over concerns about future Fed policy keep investors there on the back foot. The spike in oil prices caused by the Saudi military incursions into Yemen, has all the hallmarks of a classic knee jerk market reaction to a new flashpoint. We saw similar spikes last year with Ukraine, Libya and ISIS pushing into Iraq before markets settled back down again, and it is likely that these concerns about Yemen could follow a similar pattern, as long as there is no significant disruption through the straits between the Gulf of Aden and the Red Sea. Yesterday’s US economic data speaks to that wider point of uncertainty with a sharp drop in weekly jobless claims to 282k, while the latest flash services PMI rose to 58.6, also beating expectations, though US markets still finished the day lower for the fourth day in a row. This uncertainty over the US economy was acknowledged yesterday by the continued divisions between FOMC members in comments made yesterday. First up we had Atlanta Fed chief Dennis Lockhart, and voting member on the FOMC, appearing to acknowledge some fragilities in the US economy, and soften expectations with respect to the timing of a possible rate hike. On the other hand we had non-voting member and St. Louis Fed chief James Bullard reiterating his call for a rate increase, while the Chicago Fed chief Charles Evans, and voting member, rounded off the day by saying there was no rush to raise rates with inflation so low, just to make things nice and clear for all in the markets. Given how markets have reacted in the aftermath of last week’s Fed decision today’s speeches by Fed vice chair Stanley Fischer and Fed chief Janet Yellen are likely to be much more closely monitored than usual, particularly if US Q4 GDP is not revised up as expected when the final revision is released later today. Expectations are for an upward revision from 2.2% to 2.4%, with personal consumption likely to be the main driver of the upgrade. Given this week’s disappointing durable goods numbers, and revisions you have to question whether that will still be the case. UK watchers should also look out for key speeches from Bank of England governor Mark Carney, and MPC member Ben Broadbent later this morning, where in the light of yesterday’s great retail sales numbers, whether they will choose to be as dovish about the UK economy as they have been in previous speeches thus far. EURUSD – yesterday’s failure at 1.1050 could well see the euro drift back towards trend line support at 1.0820, from the lows this month. While above this level the potential remains for a break higher, through 1.1050 towards the 1.1250 level. A move below 1.0800 could well see a decline back towards 1.0600. GBPUSD – yesterday’s rebound saw the pound fail to overcome the 1.5000 level, but it is currently finding support just above the 1.4800 level. A break either side of this range could well see a 200 point move in either direction. We need to push beyond 1.5000 to target last week’s high at 1.5170. If we push below 1.4800, we could well be set for retest of the lows this month at 1.4630. EURGBP – yesterday’s failure to push through the 0.7400 level has prompted a pullback which could well see a retest of the trend line from the March lows, which currently comes in at 0.7285. Given we’ve also seen a bearish daily reversal, we could well push below that, towards 0.7200. Above 0.7400 targets 0.7500. USDJPY – yesterday’s rebound off the 118.30 level has prompted a minor pull back, but for the downside pressure to subside we really need to get back above the 120.30 area. The fact that we posted a daily hammer could well be constructive for a move higher to unfold. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.