Better than expected US economic sentiment and housing data yesterday afternoon saw the S&P500 post another record high yesterday, but the move higher proved short lived as the afternoon session saw a wave of selling unfold, on reports from Iraq that Syrian fighter jets had bombed ISIS positions in the western part of the country, in the process adding a further thread to the geopolitical melting pot. While US markets managed to make new record highs there was no such enthusiasm in European markets, particularly after German business confidence data dropped to a seven month low at 109.7, suggesting that despite the ECB's measures to boost the economy earlier this month, businesses in Germany remain unconvinced that they will be successful. As a result of last night’s sell-off in US markets European markets look set to open lower this morning, as geopolitical uncertainty grows over the prospect of Syrian intervention into the Iraqi situation, adding a whole new element to this particularly fluid saga. What was more interesting was the reaction of the oil price to this news, unlike equities was fairly benign, though US treasuries did move higher. In Europe the only data of note is the latest Germany consumer confidence number, which is expected to rise to 8.6, while in the UK the latest CBI retail sales numbers for June are expected to come in at 23, up from 16 in May, showing a pick-up in consumer activity as Q2 comes to a close. For all the expectations surrounding yesterday’s appearance by Bank of England governor Mark Carney in front of the Treasury Select Committee, markets were left with no clearer idea as to when an interest rate rise would come in the UK. After coming over all hawkish about two weeks ago, Carney reverted to dovish type stating that any rise was data dependant and that there still remained significant spare capacity in the UK economy. These comments resulted in the headline of the day as the Bank was compared to an "unreliable boyfriend", sending out mixed messages to the markets and the public at large. The Governor tried to explain his message by stating that he was looking to quash speculation that rates were "never going to go up" but it’s unlikely that markets were ever under that impression for one moment. So after yesterday's about turn we’re back to where we started a couple of weeks ago and analysing the relationship between the inflation numbers and average earnings. The only data of any note today is the latest US Q1 GDP revision which is expected to be a singularly unimpressive number, coming in at -1.8%, a sharp downgrade from the previous -1% number. This represents a remarkable turnaround from where expectations for Q1 GDP were at the end of April, less than two months ago where the expectation was for growth of 1%. If today's US revision comes in anywhere close to expectations that would represent a 2.8% negative swing, which would mean that we would really need to see a much stronger economic bounce back than is currently being suggested by the most recent data, which is OK, but is certainly not ripping up any trees. In data that is more up to date May durable goods are expected to show a decline of 0.3%, though the latest June Markit Services PMI is expected to be positive at 58. EURUSD – the price action continues to compress below the broader resistance below 1.3670, but above last Friday's low at 1.3560. Only a move beyond 1.3675 argues for a move back towards 1.3780. We also have key trend support from the 2012 lows at 1.2045, which now comes in just above 1.3465. GBPUSD – the pound appears to be finding the air a little thin above 1.7000 for the moment. We could well see a move back towards 1.6910, after closing below 1.7000 yesterday. A drop below 1.6910 sees major support all the way back at the 100 day MA at 1.6725. The risk remains for a move towards 1.7330 the 50% retracement of the decline from the 2007 highs at 2.1160 and the lows at 1.3500 in 2009. Ideally we need to see a monthly close above 1.7000 for this to unfold. EURGBP – we appear to be forming a short term base just above the 0.7960 area which continues to hold the downside. As such we remain at risk for a pullback towards the 0.8085 area if we sustain a move above 0.8035. The pressure remains on the downside while we remain below trend line resistance from the March highs sitting just below the 0.8110 level, with a longer term target at 0.7880. USDJPY – still in a range with support around the 101.60 area and the 200 day MA, with a move back through the 200 day MA needed to retarget the range trade lows of this month near 101.00. The range highs remain anywhere below the 103.00 area and last week’s high at 102.75. 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.