Despite the absence of the US, Europe’s markets saw another positive day yesterday with the DAX continuing to make record highs and broader European markets also remaining fairly robust despite concerns over the resilience of the recovery in Europe. With speculation about possible further rate cuts in Europe never too far away yesterday’s German CPI numbers made the prospect of another cut that much less likely at next week’s ECB rate meeting after they jumped sharply in November to 1.6%. It was only a month ago that the weakness in the October Eurozone CPI numbers prompted a 25 basis point rate cut in the ECB’s headline rate earlier this month. Today’s November number is unlikely to precipitate a similar cut with it expected to tick higher to 0.8% from 0.7%. Just before that German retail sales for October are expected to show a rise of 0.5% but it is the latest EU and Italian October unemployment numbers which are expected to garner most of the attention with the EU measure remaining at a record 12.2%. The Italian unemployment numbers aren’t expected to improve either, remaining at 12.5%, another record with youth unemployment remaining above 40%. These numbers aren’t likely to improve rapidly either if the recent bank lending figures in Europe are anything to go by with figures released yesterday showing it at its lowest levels for over 20 years, and continuing to shrink sharply. Wednesday's UK GDP numbers certainly gave the Chancellor something to be positive about ahead of next week’s Autumn Statement. They do show that the UK consumer remains an integral part of the current rebound in economic activity and while that is a blessing it is also a concern after a report from the Money Advice Service (MAS) showed that 9 million people across the UK are living with serious debt problems. This is the ticking time bomb that could derail the UK recovery if the necessary rebalancing of the UK economy that the Chancellor talked about in his "March of the Makers" budget speech in March 2011 doesn't start to bear fruit in the lead-up to the next election. The fall in exports in this week's GDP numbers speaks to the problems facing the UK economy and today's credit numbers look likely to reinforce concerns about this consumer driven recovery. Consumer credit for October is expected to rise by £0.7bn, while net lending against housing is expected to rise to £1.3bn. Mortgage approvals are expected to rise to 68.5k from 66.7k, their highest level since April 2008, and will probably justify yesterday's decision by the Bank of England to terminate its funding for lending program for households, which does appear to be an acknowledgement that recent incentives to stimulate lending are starting to have dangerous side effects. EURUSD – we need to get beyond 1.3650 to argue for a move towards long term trend line from the all-time highs at 1.6040 which comes in at 1.3950. Any pullbacks need to stay above the 1.3480 area for the current positive momentum to continue. Only a break below the 1.3480 level would then argue for a move to the lows last week at 1.3400, and then below that 1.3300. GBPUSD – the pound continue to close on the highs this year at 1.6380, and while above support at 1.6250 the prospect of further gains towards 1.6500 remains a real possibility. Pivot support remains at 1.6110, a break of which argues for a move back to the multi week support at 1.5880/90. EURGBP – having failed close to the 0.8400 level this week only a move beyond the 0.8420 level would suggest the risk of a larger squeeze higher. The main support lies at the recent lows at 0.8305, but the ultimate target remains for a move below the 0.8320 level towards 0.8280, 50% retracement of the entire up move from the 2012 lows and the high this year. USDJPY – last week’s break higher beyond the September highs at 100.60, now targets the highs this year at 103.75 which is the next obstacle to a move to 105.00. Any pullbacks could well find support at the 100.60 level, and if we were to break below the 99.20 level we could see a deeper fall towards 98.50. 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.