In the absence of any significant economic data in the early part of this week, core European markets were stuck in the doldrums yesterday with no real clear direction despite yet again new all-time highs on US markets. Instead the focus has been on the more mundane matter of corporate earnings which are both beating and missing expectations in equal measure. While US markets continue to remain underpinned by the receding prospect of a Fed taper in September the same exuberance appears to be eluding European markets, which have continued to struggle to recover the highs seen earlier this year, as concerns about slowing Chinese growth, a stagnant European economy and a reluctant ECB temper enthusiasm in Europe's core markets. With this trifecta of factors at play you would expect to see Europe's markets open lower this morning, but some positive chatter about further easing in China, in the form of a triple R cut, after Chinese Premier Li put a floor under growth at 7% has helped push Asia markets higher and this looks likely to feed through into a positive open this morning. This despite the fact that investors continue to mull increasing debt to GDP ratios amongst the bailed out European economies as they continue to struggle under their respective bailout plans. With house prices going one way and debt going the other, the banks in Europe also look likely to remain under severe pressure. Dutch house prices fell to their lowest levels since 2003 yesterday, while Spanish prices fell to 2002 levels. This is likely to put even further strain on the non-performing loans in these countries. Southern European politics played a part in yesterday's rally across Southern European equity markets, as firstly Portugal's PM Coelho appointed his coalition partner Paulo Portas as his deputy with a pledge to push ahead with reforms and meet the terms of its bailout plans. The likelihood of an imminent election appears to have receded for now, more than likely out of political expediency than anything else; nevertheless this seems like a crisis that has merely gone dormant, ready to flare up at a moment's notice. Meanwhile across the Iberian Peninsula in Spain, after days and weeks of pressure, Spanish PM Rajoy finally announced to the country that he would appear in parliament to confront the allegations being levelled at him with respect to illegal donations and undeclared cash payments. The timing is expected to be sometime in the next couple of weeks, but it's just a pity he didn't decide to do it sooner, given the damage done to his government and its already tattered credibility. Rajoy should be concentrating on an economy that continues to be a cause for concern as the Spanish government once again raided its social security fund to help with extra pension fund payments. With unemployment set to be confirmed at 27.2% later this week this is one fund that needs all the cash it can muster. EURUSD - we broke through the 1.3180 area yesterday stopping just shy of the 1 3230 resistance area. We need to overcome this area to target a move towards the 1.3400 area. We now have rising support from the 1.3000 lows coming in at 1.3125, as well as support at 1.3060. Only a break below 1.2750 argues for a move towards the 1.2680 level which is 61.8% retracement of the entire up move from 1.2045 lows in July last year to the highs this year at 1.3710. GBPUSD - having cracked the 1.5300 area we've seen the pound move towards 1.5395 and a 61.8% retracement of the down move from 1.5750 to the lows at 1.4810. The 50 and 100 day MA at around the 1.5260 area should now act as support on any pullback. A break of 1.5400 could well open up further gains towards 1.5530. Below 1.5240 targets the 1.5160 area. EURGBP - last week's bearish key day reversal keeps the bias towards the downside but we need to break below the 0.8580 area to target further losses. We also saw a bearish weekly reversal which reinforces the downside pressure. For now any pullbacks need to stay below 0.8650. We need a break below the 0.8580 level to retarget a move back towards the 0.8520 area. USDJPY - while below the trend line resistance from the 103.75 highs at 100.80 the risk remains for a move lower, having moved back below 99.80 yesterday we could well see a fall towards the cloud support at 98.22. Intraday resistance on any pullbacks could well come in at 99.80, while only a move above 101.00 changes the outlook and retargets the highs this year at 103.75 and then 105.80. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.