A rangebound session, but with plenty of data ahead, it could get quite busy later on

EUR/USD: 1.2365

The Euro remained heavy today after some weak German data kept the pressure on the downside, although the ongoing hope of some ECB assistance to lower the borrowing costs of the indebted EU nations limited the declines to 1.2326 during the session. German industrial production was -0.9% in June from previous month's 1.6% rise, which kept a lid on it and further downside pressure was added through heavy sales of Eur/Gbp following the BOE quarterly report that limited hopes of further rate cuts in the UK.

In other news,  S&P cut Greece's outlook to negative from stable and in France, the Banque de France suggested that it expects France to slip into recession by the end of Q3. The Troika review of  Greece is to extend through September and the results will be presented October 8. Fitch reaffirmed Germany's AAA status which helped the Euro off its lows.

Generally it was a reasonably quiet day with a slow drift lower in the Euro and the equity markets were not dissimilar, with the DAX finishing -0.3%, ESToxx50 -0.1% and the S+P  -0.4%.

Technically not much has really changed. The neckline of the potential reverse head shoulder formation is beginning to look as though it may hold and currently sits at 1.2470 which is also 61.8% of 1.2740/1.2042. The 4 hour indicators are still unwinding and pointing a little lower, suggesting that any rallies towards 1.2400 should again meet good sellers. Above this would see more offers at the weeks high, 1.2442.

The dailies do still have some positive momentum though, so should we see a rally - perhaps down to some positive news from the ECB - the points to watch above 1.2470 would be 38.2% of 1.3282/1.2042 at 1.2510 and then 1.2707 (38.2% of 1.4935/1.2042).

On the downside, support is to be found at the day's lows at 1.2326. Below this, 1.2290  is 38.2% of 1.2042/1.2442 and then the 50% pivot is at 1.2242.

Overall today looks to be another rangebound affair with not too much movement in either direction. Use 1.2300/1.2400 as a guide with a mild upside bias until the major economic news of the day which will come care of the ECB monthly report and may provide the market with a bit of a boost. Other than that, the highlights will be.

ECB Monthly report, US  Trade balance, Inventories, Jobless Claims.