US Equities Slip on Weak Chinese Data: Well, well, well. Volatility returned to the markets with a bang, as the catalyst was a weak Chinese manufacturing report that sent participants scurrying for safety. Yesterday, I talked about the fact that when a market can't get above a particular level after repeated attempts, then participants will try the other direction. With the 1843 level in the S&P500 staunchly defended for the better part of a week, today we got the move in the other direction. Now, the question is, was this a short lived pullback (similar to what we saw around Jan 13th) or the start of something more serious? Will the bears be able to take control, or will the dominant theme be fear of missing the bounce? The initial support is then at 1813.50 (today's lows) with further support in the zone between 1811 and 1809.50.Dollar Gets Smacked By JPY:While there was exciting action in gold and US 10-year, I'm not going to focus on them today, though the gains in both does not come as a surprise given the slide in equities. What I will focus on is the reaction in currencies since that is where my main interest lies. For starters, let's look at the USD/JPY since it was caught up in the flight to safety. While I was bullish here yesterday, the fact that this pair fell improves the risk/reward ratio for any longs from this level, considering one does not expect the fall in equities to start a more prolonged route. The move to 103 finds support at the lows for January, and is just above the 55-daily EMA. I like the potential for a bounce here, but one has to be extremely cautious as a push down through 102.85 would mean bears have taken control. Aussie and Other Commodity Currencies Feel The Bears Wrath: The commodity block of currencies were sold off sharply against the JPY as well, let's take a quick look at the AUD/JPY. Since Australia is dependent on China to buy its mineral exports, the impact here does not come as a surprise. The slide today smashed through important pivots at 91.20 and 90.70, but did find support near 90.15, a pivot that goes back to August 2013. Im not as confident that the pair can bounce here as I might be with the USD/JPY, so what the pair does here at this important support should be watched very carefully.EUR Has Strong Day on Flash PMI Report: The Yen was not the only currency that managed some strong gains against the USD. The EUR/USD pair was also a strong performer as economic data helped to support the single currency. The pair, after 3 sessions of low volatility popped to the 1.3695 area, near the highs set last week. This will be an important level. A break above it and the pair is likely to head towards 1.38. A failure here, and the pair likely moves back towards 1.3550.