Despite trading strongly positive for a good part of yesterday’s trading, nerves about the Syrian situation soon returned with the result that US markets only ended up posting slim gains, despite a much stronger than expected GDP revision to US Q2 growth. Last night’s decision by the UK parliament to vote against military action against Syria has highlighted the contentious nature of any military strikes as the legacy of Iraq continues to temper the decision making process. This reluctance to dive in hastily appears to have reduced the likelihood of an imminent attack for now and as a result we can a modestly positive European open this morning ahead of a raft of key economic reports out of Europe, and then the US this afternoon It still seems though that traders remain reluctant to take on significantly new positions ahead of the long weekend in the US, especially so when there remains so much uncertainty in the air, and we are at the end of the week and the month. Yesterday we saw German unemployment remain unchanged at 6.8%, one of the lowest levels in Europe, but today we get a totally different perspective with the latest Italian and Eurozone unemployment numbers for July, and these are expected to show an altogether different picture. We start with Italy, which yesterday saw the Italian government agree a compromise to the deeply unpopular housing tax, scrapping it in favour of a new levy, and further deferring decisions on necessary but unpopular structural reforms. As if to emphasis the problems faced by businesses in Italy we heard the story of a frustrated Italian businessman moving his entire operation to Poland in secret, because the business was being crippled by red tape and low productivity. Today’s latest unemployment numbers for July are expected to rise from 12.1% to 12.2%, another record high for the country and the situation is unlikely to get better until the government tackles the vested interests strangling the Italian economy. The broader Eurozone unemployment rate for July, also due out, is also expected to remain high at 12.1%, just below the record high seen a couple of months ago. Given that we’ve seen unemployment levels slip back a little in countries like Spain recently there is a chance of a drop, but given seasonality factors any move lower could well be temporary in nature as the tourist season comes to an end, and temporary contracts start to roll off in September. While unemployment in Europe continues to be a cause for concern in the UK levels remain much lower given the recent recovery seen so far this year. Rising consumer confidence, now at its highest levels for four years has helped spur a recovery outside most people expectations this year, and this could well be reflected in today’s latest credit figures. This has raised doubts in some quarters about the nature of the recovery in terms of the type of growth, and today’s lending figures could well reinforce those doubts, particularly if they show net lending has risen sharply. The latest figures for consumer credit and mortgage approvals for July are expected to show a modest increase, however if the numbers come in a little hotter than expected, then there will inevitably be concerns that the current low levels of interest rates are slowly inflating a new bubble, particularly in the housing market. As for the latest US economic data while attention is pretty much focussed on next weeks August employment report we still have the small matter of an insight into US consumers spending and income habits with the latest personal income and spending data for July.Recent durable goods and retail sales data have been poor so these numbers should give an insight into the finances of the US consumer, with expectations of a rise of 0.2% to 0.3% in both, a slight decrease on the previous month. We also have the latest August Chicago PMI and University of Michigan confidence data. The Chicago purchasing managers index is expected to rise to 53 from 52.3, while the University of Michigan confidence is expected to rise to 80.5, from 80. The recent resilience show in confidence data has been somewhat puzzling given the recent poor numbers for retail sales, housing and durable goods and the downbeat reports from US retailers. If US consumers are saying they are confident they certainly aren’t translating it into spending money, which suggests that the confidence numbers are pretty meaningless. EURUSD – yesterdays break below 1.3300 now opens up the possibility of a test towards the 1.3150 area and the low four weeks ago at 1.3135. Only a move back above 1.3310 argues for retest back towards the 1.3410 area. GBPUSD – the pound continues to hold above this weeks low at 1.5440 and trend line support at 1.5410 from the 1.4815 lows. The 200 day MA is losing its importance in the overall context of the next move however the risk remains for a move back towards 1.5600 and a retest of the highs at 1.5715 last week. Only below the 1.5400 level argues for a sharper move towards 1.5340. EURGBP – yesterday’s fall through the 0.8575/80 area now opens up the risk of a test of the primary trend line support at 0.8515 from the 2012 lows at 0.7705. Just below here we have the 200 day and 200 week MA acting as additional support between 0.8474 and 0.8495 as well. USDJPY – while the cloud resistance at the 98.80 level and the 98.90 trend line resistance from the May highs at 103.75 continue to cap the upside, the bias remains towards the downside. The triangular consolidation continues to unfold and we could well see a return to the base of the consolidation at the 95.80 trend line from the February lows at 91.05. 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.