Crude Oil, China PMI, Japanese Yen, Bank of Japan, USD/JPY, FDIC, Gold – Talking Points
- Somewhat crude support withered after questioning China growth horizons
- the Japanese Yen Still under pressure after the Bank of Japan’s announcements on Friday
- It may be a quiet start to a busy week today but market liquidity will keep traders on edge
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Crude Oil fell today after Chinese data missed expectations as the Manufacturing PMI came in at 49.2 for April instead of 51.4 and 51.9 previously estimated. Non-manufacturing PMI was 56.4 instead of 57.0 expected and 58.2 previously.
The nearest WTI futures contract is near $76 while the Brent contract is just under $80.
The price of gold is also down slightly as it is trading near $1980 an ounce.
The Japanese yen added to Friday’s losses to start the week after the BoJ reaffirmed its dovish stance last Friday and the Jibun Bank PMI released at 49.5 deflationary for April today. USD/JPY looking to move above 136.
Expectations for end-yield curve control (YCC) have been pushed back by a perception that new governor Ueda is reluctant to tighten as China struggles to reignite growth and the US banking sector is in firefighting mode.
Regarding First Republic Bank, the FDIC was expected to make an announcement late Sunday NST, but it wasn’t soon at press time.
Despite the weak PMI figures, stock markets in the Asia Pacific open region are mostly in the green. The Australian dollar also saw modest gains ahead of tomorrow’s RBA interest rate decision as the market is not expecting any change.
Many markets are closed today for a holiday, but a busy week awaits with several central banks meeting to decide on monetary policy, most notably the Federal Reserve and the European Central Bank.
The full economic calendar can be viewed here.
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Crude Oil Technical Analysis (WTI)
WTI is down today after posting strong gains on Friday.
The rise occurred after testing the 50% Fibonacci retracement level of the move from 64.36 to 83.53 at 73.94. This level may continue to provide support before the breakout points in the region of 72.25 – 72.46. A nearby breakout point at 75.72 may provide support as well.
On the upside, resistance could be at the recent high of 79.18. Moreover, there is a series of previous breakouts and tops in the 82.50 – 83.50 area which might provide an area of resistance.
– By Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @employee on Twitter