If relations weren’t strained enough already between Greece and its creditors already, the tone of the debate in the last 24 hours is hardly likely to improve matters, as both sides engage in what can only be described as megaphone rhetoric, each side blaming the other for the current deadlock. The market uncertainty has contrived to keep downward pressure on equity markets across the board, pushing the FTSE100 down to three month lows. With reports already circulating of plans by EU creditors to impose capital controls in the event Greece rejects a take it or leave it deal set to be put forward on Thursday, it would appear that the clock is ticking ever so closer to midnight, or to take the analogy that little bit further we are now at DEFCON 1 with respect to the seriousness of the current situation, and a potential default. In fact relations are now so bad it is hard to see how any agreement can possibly be reached at this late stage with Greek finance minister Varoufakis confirming that no further alterations would be made to their current demands, which means that unless one or the other side changes its tune we’re heading for a default, the only question is when. In what is somewhat ironic timing the European Court of Justice is due to give its legal ruling on the ECB’s so far unused OMT program later today, in the process ratifying the guidance given earlier this year, and which more or less fired the starting gun on the recent QE program. While a negative ruling is not expected, be under no illusions that a ruling that placed constraints on the ECB could well be problematic, particularly now at a time when the EU could well have to deal with the consequences of a Greek default in the next few weeks. Capital outflows have continued as a result, with another €400m withdrawn from Greek banks yesterday, while there has also been some limited contagion risk seen in Italian, Spanish and Portuguese bond markets as borrowing costs there have spiked higher. Away from the shenanigans in Europe attention turns back to the UK economy this morning with the latest May CPI inflation numbers, where after a brief flirtation with deflation in April we can expect to see an uptick to 0.1%, from -0.1%, while core CPI is expected to move back to 1%, up from 0.8%, with the rebound in prices expected to be driven by an increase in air fares, and fuel prices, though offsetting that low food prices are still expected to be a drag. A number above expectations has the capacity to push the pound, up closer towards the highs seen last month at 1.5800 The latest RPI measure is also expected to nudge higher rising to 1.1% from 0.9%. In Europe we have the latest German ZEW sentiment survey for June and given the latest moves lower in the DAX expectations are for a decline from 41 9 to 37.3, as investors fret about the potential fallout from the current spate of events. EURUSD – the euro seems content to range trade between support at the 1.1050 level and the highs this month at 1.1380/90 level. We need to see a break either side to get an indication of the next move here. The main resistance remains at the May highs at 1.1480. GBPUSD – the pound continues to be well supported on dips having pushed through the 1.5600 level yesterday and the next target sits at the May highs at 1.5815. Only a fall below the 1.5400 level suggests a move back towards trend line support at 1.5290, from the lows this year at 1.4565. EURGBP – the euro dropped down to 0.7195 last week, suggesting we could well see further weakness in the short term. To mitigate further downside pressure we need to get back through the 0.7300 area, otherwise we could well see further losses towards 0.7080. USDJPY – the break below the neckline support late last week now at 124.20 opens up the prospect of a move towards 121.80 as the recent topping pattern alluded to last week played out. The 124.20 neckline level should now act as resistance on any pullbacks. CMC Markets is an execution only service 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.