Crude Oil, China PMI, Japanese Yen, BoJ, USD/JPY, FDIC, Gold – Talking Points
- Crude support wilted somewhat after questioning of China’s growth prospects
- The Japanese Yen remains under pressure after Friday’s BoJ announcements
- It might be a quiet start to a busy week today but market liquidity will keep traders on edge
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Crude oil dipped today after Chinese data missed forecasts with the manufacturing PMI coming in at 49.2 for April rather than the estimated 51.4 and 51.9 previously. Non-manufacturing PMI was 56.4 instead of the 57.0 anticipated and 58.2 prior.
The nearest WTI futures contract is near US$ 76 bbl while the Brent contract is a touch below US$ 80 bbl.
The gold price is also slightly lower as it trades near US$ 1,980 an ounce.
The Japanese Yen added to Friday’s losses to start the week after the Bank of Japan (BoJ) reaffirmed its dovish stance last Friday and the Jibun Bank PMI printed at a contractionary 49.5 for April today. USD/JPY is eyeing a move above 136.
Expectations for an end to yield curve control (YCC) were pushed back on the perception that new Governor Ueda is reluctant to tighten with China struggling to reignite growth and the US banking sector in firefighting mode.
In regard to First Republic Bank, the Federal Deposit Insurance Corporation (FDIC) was expected to make an announcement late Sunday North American time, but it has not been forthcoming at the time of going to print.
Despite the soft PMI numbers, APAC equity markets that are open are mostly in the green. The Aussie Dollar also saw modest gains ahead of tomorrow’s RBA rate decision where the market is not expecting any change.
Many markets are closed today for a holiday, but a busy week lies ahead with several central banks meeting to decide on monetary, most notably the Fed and the ECB.
The full economic calendar can be viewed here.
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CRUDE OIL (WTI) TECHNICAL ANALYSIS
WTI crude slid lower today after posting a solid gain on Friday.
The rally occurred after testing the 50% Fibonacci Retracement level of the move from 64.36 to 83.53 at 73.94. That level may continue to provide support ahead of the breakpoints in the 72.25 – 72.46 area. A nearby breakpoint at 75.72 might also lend support.
On the topside, resistance could be at the recent high of 79.18. Further up, there are a series of breakpoints and previous peaks in the 82.50 – 83.50 area that may offer a resistance zone.
Chart created in TradingView
— Written by Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @DanMcCarthyFX on Twitter