The last week of trading hasn’t been exactly stellar as investors have entered what looks like to be a transitional period. Meaning that ranges have been tested consistently in the EUR and Gold without any significant changes. What makes this meaningful is that consistent trends among many assets have disappeared, and for the moment traders will have to shift their parameters and acknowledge that we may be seeing a change in market psychology.

Today will be interesting because telltale bits of information will come from the BoE and Fed via the MPC Asset Purchase Facility Votes and the FOMC Meeting Minutes. While no surprises are expected from these reports, it will prove worthwhile to see how central bank officials are discussing the actual strength of the U.K. and U.S.. On the surface these economies are showing more promise than others.

Examining the possibility of eventually having to raise interest rates, which would mean squeezing the wide open pipes of ‘free money’ that financial institutions have been able to borrow would clearly have a knock on effect upon equities. And there have been comments from various officials openly in recent days about the need to be able to react in a quick fashion, notably from Charles Plosser of the Philly Fed.

But the eventuality of cheap money is not going to disappear in the next three months, and it is likely that risk in the broad markets will continue to come from other areas. China comes to mind considering that its economic data has been rather unruly the past year and not consistent. The HSBC Flash Manufacturing PMI reading will come late tonight and Asian investors will be the first to react to this important publication.

The cautious range trading seen recently will likely start to impact resistance and support levels today and tomorrow and some volatility could erupt. Including the central bank murmurs, and the Chinese data, important PMI numbers will come from Europe and the States on Thursday which all will add to the potential for breakouts from consolidation.

It should also be taken into account that this coming Monday is a major holiday in the U.K. and the States and before disappearing for the weekend traders will have to position themselves ahead of any possible risk events. While the markets have been quite calm and investors would certainly like that to continue through their last pre-summer holiday break, they will be on the lookout for others who may try to jumpstart any pandemonium.

Gold is trading around 1296.00 USD as of early this morning. The FX market has been relatively tame also. Because of the important data coming from China the next two days, watching the JPY and Nikkei for early signs of stress on the global markets may prove to be wise.