The cheery sentiment we have seen within the past two days was dampened by the lower than expected pace of growth in China; the Chinese economy grew at 8.1% rate in the first quarter below market consensus of around 8.4% expansion rate; and down from 8.9% in the fourth quarter of 2011. While retail sales and industrial production showed slight expansion however just around market expectations, and fixed assets investment dropped from 21.8% to 20.9%.

The numbers from China has drawn a downbeat start for the session and could continue to dampen investors' appetite; markets continue to be data sensitive specifically from major global economies, where fears could infiltrate into the trade that China would not escape a hard landing; thus we have not seen the trough of the economic cycle yet.

China was the main headline of the session so far; however we have seen some economic releases from the euro zone and Great Britain, starting from the German Consumer Price Index which showed prices on the consumer front has remained steady last month at 0.3% in line with estimates, while Italy's industrial activities have unexpectedly contracted by 0.7%.

The U.S dollar index (USDIX) kicked off the session higher after it found support at the 50-days Simple moving average yesterday. The index started the session at 79.33 printed a high at 79.55 and currently trading around 79.50. The index has breached an important technical support at 79.60 yesterday; thus we may see downside pressure attempting to resume from this area, however if it manages to hold above 79.60 we may see further upside movement.

The EUR/USD pair pares yesterday's gains as Italian and Spanish bonds were seen back under pressure. The pair started the session 1.3187 where downside pressure resumed to trade now around 1.3150. Technicaly speaking; 1.3150-1.3140 should determine the pair's next intraday direction. Upside rebounds will lead to 1.3200 again while below 1.3140, the door could be open to 1.3090-1.3100

From the U.K., inflation at factory gates fell to 3.6% from 4.1% rate in February. The GBP/USD dropped with the start of the session as well; however the currency looks more robust. The pair opened the session at 1.5957 and currently trading around the key support level at 1.5925.

The Australian dollar rally couldn't last so long after it was interrupted by China, its major trade partner. The AUD/USD is very sensitive to the Chinese economy, thus the pair was seen under significant pressure trading currently around the 200-days SMA at 1.0385 after printing a high yesterday at 1.0451. In the near term 1.0380 and 1.0350 should form an important short term support for the pair.