Another week is coming to an end, with markets still trading with no clear direction, amid mixed economic data being released and a general feel that the worse is not really behind us. US stocks rose slightly yesterday and NIKEI followed in the same way after slight optimism that global economy may be improving followed China€™s better economic outlook.

The EUR/USD has been trading lower following this morning's German GDP number shrank its most in more than 13 years! The same has happened with the French economy; therefore traders have exited any euro positions they have! The fact that the Euro zone data continues to disappoint weighs on the currency and any rallies toward 1.40 fade quickly. The next level to watch on the downside is 1.3530 ahead of 1.35 which is a very important support level. If the latter gives way we may have further losses towards 1.3460. However, as today is Friday we may see some profit-taking in the pair and also traders may not want to be exposed during the weekend.

The pound has trading higher since early in the European session which is mainly due to the downside trading EUR/GBP. The bad economic data out of Europe, in combination with no data out of UK, is weighing on the pair and further downside may be seen if 0.8930 gives way. The next level to watch is 0.8870 ahead of 0.8825.

Today the economic calendar had a few important data out of Euro zone, which all came worse than expected, hence euro€™s current negative outlook and also later on we have CPI out of US, which traders will monitor for any hints as to how the inflation outlook is working out after all the rate cuts that FED have done over the months. Lets not forget the TICS data and also consumer confidence which may be beneficial for the greenback, if the sentiment turns negative and the need for safe haven comes back. The dollar is trading mixed against all major currencies at the moment and there is no clear direction.

The fact that Trichet said in the last monetary meeting, that Euro zone economic outlook has improved, makes one wonder, as more bad economic data are released every now and then, making investors think twice about going long euro and stay long. The truth of the matter is, that lately, traders are reacting more with their emotions rather than anything else and ones day€™s good news becomes a rally, where another day of dismal economic outlook becomes their worst nightmare. There is no sentiment on any currencies particularly at the moment, and traders are buying the less of two evils. For example, when US outlook seems gloomy, traders are turning to euro for comfort, however, that changes the minute we see deteriorating data out of EU. Until we see €œreal€ signs of improvements, and not those €œgreen shoots€ that officials are trying hard to promote, markets will trade with no direction and traders won€™t commit either way€¦

Let€™s see how the day will progress until New York closes and if the dollar will continue to gain against the euro, amid bad Euro zone economic conditions and also risk aversion towards the greenback. ..