It’s one of those universal truths that we all experience at some point in the course of our daily lives; sometimes we don’t always get what we want, and investors found that out yesterday when the Bank of Japan decided, quite reasonably in light of recent positive economic data, it didn’t need to take any further monetary stimulus steps at its latest policy meeting, despite some recent volatility in bond and equity markets. The Japanese authorities probably felt that its current program of the purchase of 7.5trn yen of long term Japanese government bonds a month, was enough for the time being given that it only started in April. This failure to pander to markets, given how addicted they have become to the easy money of central bank stimulus over recent months; the reaction wasn’t entirely unpredictable, with global markets falling heavily across the board. Last night’s losses in the US and this morning’s losses in Asia will therefore ensure that European markets once again open lower today for the third day in succession, as investors fret about the possibility that the comfort blanket of fairly easy money that they have become used to for so long may not be as freely available, which means that market and stock valuations may well have to stand much more on their own two feet and their fundamentals to justify some of the rather lofty valuations. If this uncertainty is to become the new trading environment then we can expect to see plenty of volatility either side of the bull/bear tug of war as both sides seek to assert authority. With only a flat reading expected for European industrial production data for April to worry about today the main focus in Europe will once again be on the fun and games at the German Constitutional Court which is set to conclude today after the two sides of the argument from Asmussen and Weidmann were heard yesterday about the limits, legality or otherwise of the controversial, and as yet untested OMT program. It would be a major surprise if any decision was not deferred until after the September elections in Germany. On the economic data front the main focus will be on the UK and the latest unemployment data for April and May. The ILO unemployment rate for April is expected to remain unchanged at 7.8%, while the May claimant count is set to fall by 5k. While there would appear to be some optimism about a slowly recovering economy the squeeze on consumer incomes looks set to continue with average earnings in April set to fall further from a rise of 0.4% in March to 0.2%. With inflation still well above 2% this is certainly not going to be welcome news, however if oil prices continue to remain weak then we could see prices come down a bit quicker than even the Bank of England is estimating. EURUSD – the euro continues to make new 3 month highs closing in on the key 1.3345 61.8% retracement of the 1.3710/1.2750 down move. Any move through here could target 1.3435. While below the 1.3345 level the risk remains for a move back towards the 1.3100 level and the 100 day MA. GBPUSD – the key level on the cable remains the 1.5700 area and the 200 day MA. Behind that we have 1.5785, 61.8% retracement of the 1.6370/1.4835 down move. While below here the pound remains susceptible to a pullback towards the 1.5410 area. Momentum continues to remain positive, however while below the 200 day MA caution is warranted at these levels. A move below 1.5400 reopens up a move back towards 1.5280. EURGBP – the euro range trade continues to play out here with the air thin anywhere near to the 0.8600 level. The 0.8520/30 level and 200 week MA continues to act as a broad pivot with the 0.8410 March and April lows being the key support on the down side. USDJPY – it was right to be cautious after the squeeze back to 99.30 early this week. The lows last week at 95.25 remain a key support, also being cloud support on the daily charts. A through here has the potential to target 93.60 which would be a 38.2% pullback of the 77.50/103.70 up move. To stabilise we need to see a move back above the 100 level. 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