With US markets closed today for the Thanksgiving holiday European markets are likely to be fairly subdued and expected to open mixed this morning, with the DAX in particular expected to open higher as German politicians finally, after three months of wrangling, arrived at a deal for a grand coalition that should see a government in place by Christmas. Asia markets have had a fairly positive session overnight, catching a fair wind from a positive US session with the Nikkei closing in on its highest levels since May this year as markets continue to respond well to Japanese economic data. Today’s German unemployment numbers for November are expected to show that despite a recent slowdown in the latest Q3 GDP numbers to 0.3% employment remained fairly robust particularly given recent improvements in ZEW, IFO and PMI data with the unemployment rate expected to remain at 6.9%, one of the lowest in the euro area. The German numbers certainly remain an outlier with respect to the wider euro area with tomorrow’s European and Italian numbers set to reinforce the problems that need addressing outside of Germany. Price pressures are also expected to remain subdued with CPI inflation expected to tick up in November on an annualised basis to 1.3%, well above the wider European measure of 0.8%. It is not that surprising that inflation in Germany is above the rest of Europe given the lower cost base of German industry and consumers. The lowering of unit labour costs across the rest of Europe is always likely to have a downward effect on prices elsewhere, with the sharp drop in Greece’s labour costs accounting for the sharp drop there. Also due out is a whole host of European business and consumer confidence data for November with expectations of a minor tick higher across all measures. In Spain the latest Q3 GDP number is expected to be confirmed at 0.1%, as the Spanish economy looks to exit recession, but we can expect to see reminders of the problems affecting the Spanish economy with the release of the latest Q3 house price index data which is expected to show a drop of 2.4% on the quarter, and a 7.6% fall on an annualised basis. This number will likely act as a negative read across to the non-performing loans on Spanish bank balance sheets, which are already above the levels that we saw after the initial Spanish bank bailout a year ago. EURUSD – we got our move to the 1.3620 area, but 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 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 – having broken above channel line resistance at 1.6255 this could well now act as support for a move higher if we move beyond the 1.6380 level and highs for this year. We have traded above trend line resistance at 1.6305 which is trend line resistance from the 2009 highs at 1.7045, but need to close above it for an assault on 1.6400. 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.