European bourses are lower early this afternoon and the EUR has fallen against the USD. While trading can be viewed as merely range bound, there have been a couple of things happen in the past 24 hours which may have dealt a dose of reality to the optimists who continue to wear blinders concerning the European financial crisis.

As if further evidence about Greece’s plight was needed, S&P has downgraded the country once again. But how you exactly downgrade a horse that is nearly dead in the stable may only be a question an economic autopsy can answer. The S&P has come out and said that Greece’s economy is growing less than expected and may need further bailout assistance. Our question is this – really? Did the S&P really just come to that conclusion. This has all the earmarks of the ratings agencies missing the boat completely as she began to sink in the harbor when the initial financial crisis started to encircle the United States in 2007/2008.

Does anyone in their right mind believe Greece has a snowball’s chance in Hades of surviving as a full card carrying member of the European Union’s inner circle as of today? But we digress, and we should not allow only Greece to get us started into a diatribe. German Industrial Production proved lackluster this morning when it came in with a number of minus -0.9% compared to the expected decline of -0.8%. Not a big difference you say. Well, perhaps. But Germany is the biggest economic engine in Europe and if the most significant part of the machine is starting to show signs of distress that cannot be good for the whole because if Germany doesn’t agree to pay the bill for Spain, Greece, Portugal, and Italy no one else will either. But again we digress…… is August and a time for holidays. Let’s not pay attention to the recession which is certainly occurring in Europe.

The GBP has held its own against the USD as of today. Another currency pair which may be of interest is the AUD/USD. The Australian currency has done particularly well the past couple of months against the USD. Tonight the Aussies will release Employment Change data and if it should come in worse than expected and physical resources do not sparkle, the AUD could be in a position to loss some value. Short-term those are a lot of ifs, but long-term the USD does appear to be in a position to gain against the AUD.

Gold as of this afternoon is trading around 1609.00 USD. The precious metal is following its inverse relationship to the Greenback in its time honored manner as the USD has picked up some followers as of last night – be it range trading or preservation.

While range trading may in fact be the prevailing key to the broad marketplace today, market sentiment cannot exactly be called anything but fragile. This is certainly not a bull market and traders must continue to take advantage of short-term configurations which may be polar opposite to their long-term thinking. The looming election in the U.S. will create a heavy air of uncertainty come late September and last until the results are in come November. The possibility that heavy storms could form in the fall is not a mere weather forecast.