Though US markets finished the day lower yesterday, they managed to close well off their lows after US President Barack Obama warned Russia of further consequences if they continued to be obstructive with respect to MH17, but refused to elaborate on further sanctions. US investors appear more concerned about a raft of earnings announcements due this week, than with events in Eastern Europe, and President Obama's speech will have done nothing to make them too concerned about an imminent escalation in tensions. This ambivalence on further measures by the US President appears to be designed to put pressure on EU leaders to come up with further measures of their own, with the UK leading the debate ahead of today's EU foreign ministers meeting. It still seems that France and Germany remain reluctant to tighten the screw further, raising the question of what price moral outrage. If the murder of 300 innocent people doesn't prompt a reassessment of a €1.2bn French defence contract, or a re-evaluation of the current approach to Russia, it is hard to imagine what will. This probably partly explains the rather shallow nature of the recent weakness in European equity markets, as investors perceive that narrow national interest will outweigh any decisive action in the short term, which will be particularly cold comfort to the Netherlands who have been affected most by last week's tragic events. For all the geopolitical concerns the economic backdrop in Europe continues to remain cloudy with the Bundesbank warning that the German economy stagnated in Q2 in its monthly report yesterday. Given what is currently playing out in Europe the economic outlook is likely to remain uncertain particularly if the situation in Ukraine doesn't improve any time soon. While there will be an inevitable focus on events in Brussels and Ukraine there it is also a fairly important week for the UK this week with a host of economic data due for release starting today with the latest public sector borrowing numbers for June, which are expected to show a slight improvement to £9.4bn from £11.5bn in May. We also have the latest CBI business data for July with business optimism expected to weaken slightly from 33 to 30, while total orders also expected to slip slightly in July, from 11 to 8. Later this afternoon attention shifts back to the US economy and the latest US CPI numbers for June. We've heard an awful lot of rhetoric from Fed officials in recent weeks, particularly Janet Yellen about how they feel that the recent inflationary pressures are of little concern. If that is the case they had better hope that today's CPI numbers don't continue to push higher from the 2.1% they are currently priced at. If the numbers come in higher the markets are likely to make up their own minds and reinforce the perception that the Fed could well be behind the curve, on its expectations for higher interest rates. EURUSD – while the euro broke below the 1.3500 level on Friday we haven't as yet, broken below the lows this year at 1.3477, though we have broken below trend line support from the 2012 lows at 1.3520. A move through 1.3470 could well be the trigger point for a move towards the November 2013 lows at 1.3300. A move back through 1.3570 is required for a retest of 1.3640. GBPUSD – continues to find support just above last weeks lows at 1.7035/40 and could well easily retest the highs last week just below 1.7200. Only a move back through 1.7030 would argue for a deeper move towards 1.6910. A move through 1.7200 argues for further gains towards 1.7330. 1.7330 is the 50% retracement of the decline from the 2007 highs at 2.1160 and the lows at 1.3500 in 2009. EURGBP – having found a bit of short term base at 0.7885/90, we need to see a break through 0.7960 for some signs of stabilisation. The pressure remains towards the downside and 0.7780, while below the highs last week at 0.7980 while we also have trend line resistance from the March highs, at the 0.8010 area. USDJPY – the pressure appears to be building up on the downside and a move towards 100.60 while below the 101.80 level. It would take a move through 101.80 to target the range highs just below 103.00. 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.