After a choppy US session yesterday European markets look set to start the day in positive territory as investors once again look past concerns about Ukraine and focus their attentions on defensive big cap stocks as M&A speculation contrives to boost these particular sectors. While sentiment continues to remain largely positive it should also be noted that despite the expectation of an improvement in economic data this week, that stock markets haven't, as yet, been able to push past their recent highs, suggesting some concerns about the wider recovery. As if to reinforce these pockets of concern the latest Spanish unemployment numbers for Q1 are expected to show a slight increase to 25.85% from 25.7%, despite an improvement in the overall GDP numbers in Spain. It is these eye wateringly high levels of unemployment in Spain, amongst other European economies like Italy and Greece that has prompted widespread calls for the ECB to relax monetary policy further at next week's rate meeting. It is an appeal that looks set to fall on deaf ears given ECB President Mario Draghi's reported comments to German lawmakers yesterday, and it is a view that is likely to be reinforced if today's German CPI numbers show a sharp rise from 0.9% to 1.3% as many expect they will. It would also mean that that the prospect of any form of QE in the near future, would be further away than it already is, and could well propel the already strong euro towards the 1 4000 level. It would also reinforce the ECB's belief that the recent dip in prices is temporary in nature, and reinforce their constant statements to that effect. Later this morning we get the first indications of how well the UK economy has fared in the first quarter and unlike the US it looks like any adverse effects from the unseasonably wet winter weather aren't likely to be used an excuse for any underperformance on what is expected to be a strong quarter. If anything the poor performance of the retail sector, which has helped drive the recovery over the past year, is likely to have held back the economy this quarter, which makes me a little nervous that some of the estimates for today's GDP number could be on the optimistic side. Retail sales for Q1 have showed a decline of 0.3%, with the figures for February and March unable to claw back January's poor performance. Amongst the positives has been the robust performance of both the construction and manufacturing sectors with estimates in the region of 0.9% to 1% growth for this quarter, a significant improvement on the Q4 performance of 0.7% and the fifth successive quarter of economic expansion, the best run of economic expansion since 2007, before Lehmans. EURUSD - the euro has traded in a 95 point range over the past two weeks, lacking any conviction in either direction, remaining well short of the recent highs at 1.3970. As such we continue to look as if we could well start to drift lower, but for now we appear to be finding support at 1.3780. There is also long term trend line support from the lows last year coming in at 1.3765. A break below the April lows at 1.3675 could well see a move towards 1.3500. GBPUSD - though we moved marginally higher yesterday to 1.6855 we still need to see a move above the November 2009 highs at 1.6875 to suggest a move towards 1.7000. As such this level continues to remain important with respect to further progress. We need a move above 1.6880 to put the pound above its November 2009 highs. While below here the risk of a pullback towards 1.6555 remains a possibility, on a break below 1.6670. EURGBP - the reaction off last week's lows at 0.8197 has been limited and needs to overcome 0.8250 to suggest a retest of the 0.8300 area, where there is strong resistance. While below the 0.8250 level the risk remains for a move towards the lows this year at 0.8158. The resistance at the 200 day MA at 0.8385 remains a key obstacle to further gains. USDJPY - the US dollar continues to find resistance at the 102.80 level and we need to see a move back through here to suggest a move back to the highs at the beginning of the month at 104.10. We have solid support at the 101.20 area and the March low. A move through 101.20 opens up the 200 day MA at 100.90, a break of which could well see a move towards 98.60. 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