While US markets continue to push back towards their previous all-time highs and another record close for the S&P500, European markets appear to be suffering from a little bit of vertigo, though they did rally a little yesterday. The strength in US stocks was even more surprising given comments from FOMC voting member James Bullard last night that given the recent improvements in the labour market a small taper might be possible at next weeks Fed meeting. Apart from e brief dip the comments failed to halt a slow return towards last week's highs. Maybe good news is good news after all, at long last, or maybe other factors could be at play? This other factor could well be rising hopes of an imminent US budget deal, and the prospect of an averted government shutdown early next year which appear to be acting as an effective counterweight for nervousness about the prospect of any reduction in the bond buying program next week. Europe's markets on the other hand appear to be struggling to rally after digesting this morning's Chinese data which came in somewhat mixed. On the one hand we saw industrial production for November come in slightly below expectations of 10.2%, rising 10%. Retail sales on the other hand provided some evidence that a rebalancing of China's economy could well be taking place after they rose 13.7% well above the expected 13.2% and up from 13% the month before. Yesterday's disappointing German industrial production data for October appears to have once again raised concerns about how strong the rebound in Germany actually is, with concerns that recent PMI data might be overstating the recent recovery somewhat. Today's French and Italian data isn't likely to lighten the mood either with French industrial production expected to only recover slightly from the sharp 0.5% fall in September, with a rise of 0.2% expected. Italian Q3 GDP expected to be confirmed at -0.1%, while industrial production data for October is expected to rise by 0.3%. In the UK we get the latest industrial and manufacturing production data for October which, it is to be hoped will confirm the sharp rise seen in the equivalent PMI data for the same month. History tells us that this seems unlikely but you can always hope. One of the key themes of recent data has been some of the sharp divergences between the Markit PMI data and the ONS data. Nevertheless a good number here will increase and reinforce expectations of a good start to the Q4 GDP numbers. Expectations are for a rise of 0.4% on both measures, a significant decline from the around 1% rises seen in the September numbers. NIESR is also expected to give its official estimate of UK GDP for the three months to date with hopes that last month's 0.7% could see an improvement to 0.8% in light of recent positive data. EURUSD - the euro continues to push incrementally higher with support now likely to come in at the previous resistance level at 1.3630. The first target remains the October highs at 1.3815, while behind that we have long term trend line resistance from the all-time highs at 1.6040 which comes in at 1.3940. Any dips seem likely to find support at 1.3620 Only a break below the 1.3480 level would then argue for a move to the lows last week at 1.3400, and then below that 1.3300. GBPUSD - despite a slightly lower low at the end of last week at 1.6294 the pound remains solidly above support at the 1.6250 level. While this level remains intact then the potential for a move to 1.6520 remains. Only below the 1.6250 support would argue for a retest of pivot support at 1.6110, a break of which argues for a move back to the multi week support at 1.5880/90. EURGBP - the failure at 0.8400 appears to have prompted a slide back lower. The key resistance remains below the highs of the last four weeks at 0.8415. For the move towards 0.8170 to play out we need to see a move back below the 0.8320 area, which acted as initial resistance after last weeks low at 0.8250. USDJPY - we look to be closing in on the 103.75 level and May highs. A move beyond here targets 105.70 the 61.8% retracement of the down move from the 2007 highs at 124.30 to the 75.30 lows. Dips once again need to stay above the 100.60 area for this move higher to continue to play out. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.