The EUR has turned the heat up on the USD in the past 24 hours and is now testing important resistance levels. American data yesterday was a mixed bag, the Pending Home Sales numbers showed a good improvement, but the Chicago PMI report was negative. Inflation data from Europe has proved disappointing too, highlighting that stagnation on the continent is rife and the threat of economic erosion remains a tangible threat – recession.

Gold has kept its higher values but appears to be bumping up against important resistance levels and bears may be eyeing the precious metal for a tactical selling opportunity. Gold as of this writing is near 1326.00 USD. Crude Oil remains within a highly speculative realm considering the political chaos that still surrounds the Middle East in oil rich Iraq. WTI (West Texas Intermediate) remains highly valued and for those who have strong stomach may look like a sell.

PMI data has been published in Europe this morning from Spain via the manufacturing sectors and came in with a better than expected number, but the Italian result was negative. The U.K. will release its Manufacturing PMI numbers shortly. The U.S. will get into the act with the ISM Manufacturing PMI too later today. An interesting piece of data to watch today might be the Total Vehicle Sales report from the States too.

Equity markets globally have been a bit cautious short-term, but after such a major run up that should be expected. The larger question is how much more upside is possible after such a bull run? But then again, investors are still eyeing cheap money and the flood gates are not likely to be closed by the central banks within the next year. Both the Fed and ECB are certain to maintain low-interest rates for the foreseeable future. At some point however investors may actually start to look at PE ratios, but for the time being a closed eyes policy is proving too profitable.

The FX markets continue to see a weak USD. While the EUR is certainly testing highs, the GBP is also maintaining a very strong path against the Greenback. The JPY could prove an interesting range trade opportunity, the Yen has been stronger against the USD, and the Tankan Manufacturing Index was negative earlier today.