For a long time now the Eco Watchers Survey has been our favorite gauge of Japanese consumer sentiment. This "man in the street" poll of barbers, taxi drivers and waiters offers some of the  best clues to future Japanese consumer spending. Tonight, it shocked yen bulls by printing at 52.1 versus 56.2 expected. While the reading remained above the 50 boom/bust level it dropped more than  3 points from the period prior * the largest such monthly drop in more than 19 months.  If this indeed is a leading indicator of slowing Japanese consumer demand, then it  casts doubt on any change in Zero Interest Rate Policy  by BoJ speculation of which dominated trading last night. As a response to the news, USD/JPY recaptured the 118.00 level once again rising to 118.35 by midday European trade.

In Europe, the EUR/USD spend most of the night treading water around 1.1970 despite a lower than expected German Trade surplus which printed at 9.2 Billion vs. 13.0 Billion projected.  Exports rose less than expected 0.8% and imports skyrocketed by 5.8% led primarily by higher energy costs. The market however, shrugged off the data, essentially believing that the oil shock  was a one-off event. With little eco news to drive trading for the next 24 hours, technical levels begin to take on a much greater importance. As such the 1.1950 barrier remains key to EUR/USD support.  Most likely dollar bulls will attempt to make a run at that level once again and the pair's price action around this pivot point may provide clues to its near term direction.

Boris Schlossberg is a Senior Currency Strategist at FXCM.