This is a review of the elements likely to affect foreign exchange (Forex) trading in the European session:

Main headlines:

Spain prepares to make rescue request - FT

Fed officials offer divergent views on inflation risks - Reuters

China slowdown could be nearing end - FT

RBA Saw Rate-Cut Scope as Asia Slowdown Weakens Mining - Bloomberg

'Stable allocations' theory wins Nobel prize - FT

Americas wrap-up:

Consumers Paying Down Debt Helps Boost U.S. Expansion - Bloomberg

Business Economists Reduce U.S. GDP Growth Forecasts - Bloomberg

Manufacturing in New York Region Contracts for Third Month - Bloomberg

Fears over US mortgages dominance - FT

Low Expectations for Earnings Could Boost Surprises - CNBC

Obama can't afford another debate fumble - Reuters

Head of CEO group urges fiscal cliff deal - Reuters

Peru Central Bank Buys Most Dollars Since August on Tax Flows - Bloomberg

Sprint deal not a game-changer - Reuters

Asia-Pacific summary:

Asian Stocks Rise as Exporters Gain on U.S. Retail Sales - Bloomberg

Japan Set to Overtake China as Top U.S. Lender - Bloomberg

Seoul-Tokyo relations turn sour

Vietnam Communist Party Apologizes to Nation - Bloomberg

Foxconn Found Underage Interns Worked at China Campus - Bloomberg

Asian Currencies Advance After U.S. Retail Data Beats Estimates - Bloomberg

N.Z. Dollar Drops on Slowing Inflation; Aussie Holds Gain - Bloomberg

European news:

EU Leaders to Focus on Euro-Zone Reform - WSJ

Prices fuel fears of German housing bubble - FT

Rajoy Bets on Market Turmoil to Ease Bailout Terms - Bloomberg

S&P Cuts Santander, BBVA Ratings After Spain Sovereign Downgrade - Bloomberg

Portugal Unveils New Budget - WSJ

Greek Stock Market to Trail Vietnam as Coke Leaves - Bloomberg

Cameron and Salmond sign Scotland deal - FT

RBS suspends head of rates trading - FT

Refugees to Turkey Top 100,000 - WSJ

EU Approves New Iran Sanctions - WSJ

Willem Buiter: The euro faces an 'exit of the strong' - FT

Soros: Euro Zone Could Be Destroyed by 'Nightmare' Crisis - CNBC

FOREX action

EUR: The euro cross-rates are edging up despite growing concerns over the looming Spanish bailout. In the next few days EU leaders will meet in a new summit that is poised to focus on Greece and Spain. EUR-USD is firming close to but below the 1.30 resistance area. We are waiting for the breakthrough of that threshold to confirm the formation of a batman technical pattern. EUR-JPY is rallying close to 102.50.

GBP: The sterling crosses are moving in synch with the euro crosses. Cable is close to 1.6085 while GBP-JPY is above 126.00 heading towards 127.00. EUR-GBP is trading near 0.8070. The 0.8100 zone is the next area of resistance to beat. Today, all the attention is turning to September's CPI and factory gate prices in the UK.

CHF: The Swiss franc is showwing strength against the greenback. USD-CHF is visiting the low end of the 0.9300-0.9400 range. EUR-CHF is trading below but close to 1.2100.

Nordics: The Swedish krona and the Norwegian kroner have put in a mixed performance. Both the SEK and the NOK are advancing against the dollar and are more neutral versus the common currency. After yesterday's well deserved pause EUR-SEK is trading near 8.6270 and EUR-NOK can be found tracing out a triangle technical pattern as it trades close to 7.40.

USD & JPY: The US dollar was greeted yesterday by strong retail sales numbers. Meanwhile, the Japanese yen is weak across the board amid intervention rumours. Today's macro figures in the US could affect USD trading, above all CPI and industrial production data.

CAD, AUD & NZD: Despite RBA minutes pointing to rate-cut scope the Aussie moves up. AUD-USD is trading under 1.03. Recent macroeconomic figures in China show that growth is cooling and that is taking its toll on mining.

Related share prices