While we saw the UK market post its third successive weekly gain last week, the picture in the rest of Europe and the US was much less positive with both Europe and US markets struggling to rally further in the wake of some disappointing earnings reports, political uncertainty and disappointing economic data. It was somewhat of a turnaround to the beginning of last week when European GDP for Q4 actually came in slightly better than expected the week before, but this early optimism was tempered by more up to date economic reports from European companies, disappointing PMI data for February from France, Germany and China, and yet another Italian Prime Ministerial appointment. While the weekend appointment of Matteo Renzi as Italian Prime Minister is no doubt welcome, the new kid on the Italian block is unlikely to be cut much slack inside or outside Italy, given the nature of his usurping of Enrico Letta. He will be under pressure to show swift signs of progress on his ambitious reform program given that unemployment for January is likely to have remained at an eye-wateringly high level of 12.7% in data due out later this week. We also had the weekend news out of Sydney from G20 finance ministers that they intended to take measures to add $2trn to the global economy over the next five years which while welcome, didn’t really shed any detail as to how this would be achieved. Despite this we can expect to see European markets open slightly lower this morning as concerns about China, and Friday's weaker US close weigh on sentiment. Unfortunately this G20 policy of jam tomorrow won’t solve the more immediate problem in Europe which is one of declining prices and weak economic growth, with the latest German IFO survey expected to follow in the footsteps of last weeks disappointing ZEW survey and slightly below par manufacturing PMI data, in coming in slightly lower than the previous months reading. The latest business climate survey for February is expected to slow ever so slightly from the 110.6 reading seen in January to something in the region of 110.4, with concerns about falling prices, even in Germany starting to resonate ever louder, particularly in light of next week’s looming ECB meeting. This morning’s final January CPI numbers for the euro area are expected to show a 1.1% month on month fall in prices, with the year on year number expected to remain at 0.7%, with core prices remaining at 0.8%. Last month’s fall from 0.9% to 0.7%, it was widely thought, could have prompted the ECB to have cut rates earlier this month, but the fact that core prices remained steady appeared to have staid the ECB’s hand, due to the fact that a large part of the fall had been down to falling energy prices. A further fall in the year on year rate is likely to ramp up speculation about possible action next week, and increase the pressure on the ECB governing council to take further steps to ease policy further. EURUSD – the euro continues to struggle to push much beyond recent highs, with the key resistance still at 1.3840, long term trend line resistance from the all-time highs at 1.6040 and ultimately this remains the key obstacle to a move through 1.4000. The negation of the bearish engulfing monthly candle last month is a blow to the downside scenario, but while we remain below 1.3845 it just about remains intact. GBPUSD – the pound continues to run into some selling interest just above the 1.6700 level. The failure at 1.6820 last week could prompt a fall back towards 1.6510/20, particularly if GDP data disappoints later this week. The bias remains for further gains but we could well see a correction first. EURGBP – last week’s rebound appears to be finding resistance near the 0.8270 area. While we remain below the long term trend line resistance above 0.8330, the bias remains for a retest of the 0.8160/70 area. A drop below 0.8160 targets a move towards the 2010 lows and 0.8065. USDJPY – the US dollar continues to find selling interest anywhere near the 102.80 level with a move above the 103.00 area required for a move back higher. This suggests that the risk remains for a drift lower towards the 200 day MA at 100.20. Last weeks low at 101.40 keeps the pressure on the downside with the first support at the twin lows at 100.80. To stabilise we need to see a move back above the 103.00 level, and the highs this month to argue for a return to the 105.50 area. 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.